There are several reasons why a creditor may decide to assign their debt to someone else. This option is often used to improve liquidity and/or reduce risk. A lender may need a quick injection of capital. Alternatively, it might have accumulated many high-risk loans and be cautious about the fact that many of them could break down. In such cases, creditors may be ready to get rid of them quickly for cents on the dollar, if that means improving their financial prospects and appeasing worried investors. At other times, the creditor may decide that the debt is too old to waste its collection resources or to sell or assign them to a third party to absorb the collection activity. In these cases, a company would not transfer its debts to third parties. CONSIDERING that the debtor is indebted to the creditor up to [amount WRITTEN IN DOLLARS OF DEBT] (amount in dollars)) (the debt); and THIS AGREEMENT is concluded on this current day of the current month, the current year, between the name of the company (hereinafter referred to as “debtor”) and the name of the company (hereinafter referred to as “debtor”). The purpose of this Agreement (hereinafter referred to as “Agreement”) is to act as a debt transfer for the addition of a general description of the debt, as described in Annex A, hereinafter referred to as “debt”, from the name of the company to the name of the company, valid from the date of this Agreement. Therefore, the parties agree to the following with respect to the transfer and repayment of the debt.
The amount must be disproportionate to the value of the debt to be innovated.