General Assignment Agreement
A General Assignment is a process in which a debtor gives away his property or possessions to a company or an individual and in return, he wants the other party to sell his property and pay back his debts to his creditors. The person who gives away his possessions or property is known as the assigner and the other party that receives it is known as the assignee. In order to go through this process, the assigner and assignee are required to sign on the contract known as general assignment agreement.
Types of General Assignment:
There are basically three types of general assignments; including the general assignment, partial assignment and special assignment. The general assignment is when the assigner assigns his entire property or all the assets that he owns to the assignee. Partial assignment is when the assigner only gives away a part of his property or a few numbers of his assets to the assignee. The special assignment is the one in which the assignee has the obligation and responsibility of paying off only few or mentioned creditors according to the assigner where leaving the remaining creditors for the debtor himself.
Difference between General Assignment and Fraudulent Conveyance:
Usually when we talk about general assignment or debt assignment, people assume that it’s not legal and if you go through this process, you are actually committing a fraud where in reality, it is not fraud and you can go with this process legally. There is a difference between general assignment and fraudulent conveyance. In general assignment, you only assign your property to a third party and he has the responsibility of pay off to your creditors and along with this process, your property is both in your and your creditors’ reach. On the other hand, fraudulent conveyance is illegal in which you actually sell your property to a third party and collect the money yourself without the intentions of paying off your creditors.
Key elements to include in the General Assignment Agreement:
- Name of the person i.e. debtor or assignor who is assigning his property to another party with complete address
- Name of the person who is getting the property i.e. assignee with complete address
- Date when the general assignment is being signed by the assignor
- Details of the assignment given by the assignor i.e. type of property or asset, legal or market value of the assignment, type of assignment i.e. general, partial or special etc.
- Reasons of assigning the property to someone else explained by the assignor
- Written statement that the assignor is willingly assigning the property to the assignee
- Responsibilities and obligations of the assignee after receiving the assignment
- Details of the other creditors that the assignee will pay on behalf of the assigner after receiving his property
- Financial compensation or other kind of favor that the assignee has agreed to pay to the assigner in exchange for the assignment
- Signature of the assigner and assignee with witnesses
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