A creditor can assign a claim to another person by written agreement without the debtor's consent. Ancillary entitlements and related rights pass with it. The debtor must be notified without undue delay; until then, payment to the original creditor can still discharge the debt. Claims tied to the creditor's person, exempt from enforcement, or subject to a statutory or agreed assignment prohibition cannot be assigned.
Do I need the debtor’s consent?
A claim is an asset and can generally be transferred. The creditor, or assignor, may assign it by written agreement to another person, the assignee, even without the debtor’s consent (Section 524(1) of the Civil Code). Writing is required; an oral assignment will not hold up. Ancillary entitlements, such as interest, and all related rights, including security, pass to the new creditor with the claim (Section 524(2)).
Which claims cannot be assigned?
Not every claim is assignable. Assignment is excluded for a claim that ends no later than the creditor’s death or whose content would change with a change of creditor, and for a claim that cannot be subject to enforcement (Section 525(1)). A claim also cannot be assigned if this would conflict with the law or an agreement with the debtor (Section 525(2)). It is therefore important to check for an assignment prohibition, or pactum de non cedendo.
Must I notify the debtor?
To ensure the debtor knows whom to pay, the assignor must notify the assignment without undue delay (Section 526(1)). Until the debtor is notified or the assignee proves the assignment, payment to the original creditor also discharges the obligation. If the assignor gives the notice, the debtor can no longer demand production of the assignment agreement (Section 526(2)). Correct, timely notice therefore protects the new creditor against payment to the wrong recipient.
When assignment is used
Assignment is used in claim sales, financing, intra-group transfers and the resolution of disputed debts. We prepare the agreement, debtor notification and assignment prohibition checks through assignment and set-off of claims. If the assigned claim also needs collecting, we follow through with debt recovery, and often coordinate the assignment with a bespoke commercial agreement.
This answer provides general information on the law as at 21 July 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
