Debt Assignment
 |
Definition of 'Debt Assignment'A transfer of debt, and all the rights and obligations associated with it, from a creditor to a third party. Debt assignment may occur with both individual debts and business debts. The company assigning the debt may choose to do so in order to improve its liquidity and/or to reduce its risk exposure. |
 |
Investopedia explains 'Debt Assignment'The debtor must be notified when a debt is assigned so that he or she will know who to make payments to and where to send them. If the debtor sends payments to the old creditor after the debt has been assigned, it is likely that the payments will not be accepted, which could cause the debtor to unintentionally default. Also, when a debtor receives such a notice, it is a good idea for him or her to verify that the new creditor has recorded the correct total balance and monthly payment for the debt owed. |
Related Definitions
Articles Of Interest
-
The Importance Of Your Credit Rating
A great starting point for learning what a credit score is, how it is calculated and why it is so important. -
Off-Balance-Sheet Entities: An Introduction
The theory and practice of these entities varies greatly. Investors need to learn what they're getting into. -
What Is A Corporate Credit Rating?
Is the bond you're buying investment grade, or just junk? Find out how check the score. -
What are the differences between chapter 7 and chapter 11 bankruptcy?
Chapter 7 bankruptcy is sometimes also called liquidation bankruptcy. Firms experiencing this form of bankruptcy are past the stage of reorganization and must sell off any un-exempt assets to ... -
4 Credit Card Rewards Gimmicks Revealed
Credit card rewards programs are everywhere, but some are more rewarding than others. Learn to spot the "rewards" that can leave you feeling like a loser. -
Financial Risks That Don't Pay Off: The Cost Of Reckless Financial Behavior
Despite the recessions, citizens continue to take financial risks and spend outside of their means without fully appreciating the potential consequences for both themselves and the wider economy. -
10 Steps To Help Erase Errors On Your Credit Report
According to a study conducted by the Federal Trade Commission, one in four consumers identified errors on their reports that might affect their credit rating in 2013. -
Understanding Leverage Ratios
Large amounts of debt can cause businesses to become less competitive and, in some cases, lead to default. To lower their risk, investors use a variety of leverage ratios - including the debt, ... -
How To Break Your Bad Financial Habits
If the current level of economic growth is to be maintained and improved upon, citizens must play their part by practicing responsible spending and borrowing. -
How To Reduce Your Debts Without Spending Unnecessarily
While it is not possible to repay your debts without investing money into the process, you should avoid spending unnecessary sums of cash in the pursuit of a financially liberated future.
Free Annual Reports