What is a Notice of Assignment?

The Law of Property Act, 1925, lays down the requirements for both types of assignment. The criteria for a Legal Assignment include:

• It must be made in writing (Deed of Assignment)
• Notification must be sent to the borrower (Notice of Assignment)
• The assignment must be absolute

Legal Assignment gives the assignee powers to enforce the debt, unlike an Equitable Assignment where the purchasing party is unable to take enforcement action in their own right.

Under an Equitable Assignment, only the amount owed is assigned, and not the original creditor’s rights and responsibilities.

What happens after a Notice of Assignment has been issued?

The Legal Assignment process ensures that all the rights and responsibilities of the original lender are adopted by the assignee. Sometimes the purchasing company has in-house collection procedures, or uses the services of a third party debt collection agency.

As far as your credit file is concerned, the company taking on the debt will notify the Credit Reference Agencies of any default once repayments have started. You’ll see a name-change on your credit record in respect to this debt. The previous company’s name should be removed, and any default will now be associated with the new creditor.

The assignee may decide to hire a debt collection agency to collect the debt in full, in which case you should respond quickly to phone calls and letters. The debt collection company may be open to negotiations for a repayment plan, rather than taking further action against you.