Renewal of Notice of Assignment of Accounts
Mostly the creditors receive their accounts receivable but there are some particular situations in which either the creditor isn’t in position to receive payments from the debtors or doesn’t want to wait that long to receive the last final payment. In this scenario, the creditor assigns his accounts receivable to a third party known as collector or assignee. This process is known as assignment of accounts receivable or factoring in most cases.
Introduction to the Renewal of Notice of Assignment of Accounts:
If a creditor wants to go through the process of factoring or assigning, he has the legal obligation and responsibility of informing his debtors and account holders about the change of the situation and to let them know that from the point of receiving the notification, they are asked to redirect their payments to the mentioned assignee. This notification letter is known as the notice of assignment of accounts.
Introduction to the Renewal of Notice of Assignment of Accounts:
Usually when a creditor assigns his accounts receivable to a third party, this is for permanent basis which means until full debt is paid, the debtors are asked to redirect their payments to the assignee. In some cases, the assigner advises his debtors that he has assigned their accounts to the assignee for temporary basis which means after sometime, he can either terminate the assignment and receive the payments by himself or renew the assignment and let the assignee receive the payments. In case he wants to go with the assignee after the deadline ends, he has to inform the debtors and let them know about the renewal of the assignment.
Who should write the Renewal of Notice of Assignment of Accounts?
Local laws and government regulations don’t force any particular party to send this renewal of assignment notice to the debtors and either of the assigner or assignee can send this letter but it is better that the assigner sends this notice. This is because if the assignee sends this notice to the debtors, they will require him to authenticate the notice and provide some kind of proof of renewal of the notice which will take more time so it is better that this letter goes from the assigner or actual creditor as this will authenticate the renewal and it will inform the debtors that they can go with the renewal without worrying to evaluate it first.
Key elements to include in the Renewal of Notice of Assignment of Accounts:
- Name of the assigner with complete address
- Name of the assignee with complete address
- Date when the notice is being sent to the debtors
- Reference to the previous notice sent to the debtors about the assignment
- Clear statement that the assigner still wants the debtors to pay to the assignee and he has renewed the assignment agreement.
- Details of the renewal of the assignment letter i.e. validation and expiration date etc.
- Signature of the assigner or assignee who is sending the letter
Here is preview of a Free Sample Renewal of Notice of Assignment of Accounts created as fillable PDF Form,
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