Today in the article we will describe the process of drawing up a debt transfer agreement and methods of protecting it from being challenged, as well as consider the circumstances without which the debt transfer agreement will be recognized as unconcluded.
Let’s consider 4 options
1 option — to obtain the consent of the creditor in advance: for this purpose we recommend you to send a request for consent to the creditor, in which it will be necessary to indicate the origin of the obligation for which you request consent and its amount, as well as the term of repayment. It is also worth specifying the details of the new debtor, its registration data: if it is a legal entity, specify TIN or OGRN and the address of its location, if it is an individual you should specify full name and passport details. It is important to mention that the creditor can withdraw its consent in this situation, but if it happened after the transaction, its withdrawal will be considered invalid according to the position of the Supreme Court.
— clause 57 of the Resolution of the Plenum of the Supreme Court of Justice of 23.06.2015 No. 25
We will pay special attention to the position of the Moscow District Court according to which the creditor’s consent to the transfer of debt itself does not meet the characteristics of a transaction set forth in Article 153 of the Civil Code and cannot be challenged in case of bankruptcy of the creditor, but there is exactly the opposite judicial practice in cases where the courts consider the consent as a transaction and recognize it together with the debt transfer agreement itself as invalid.
— Resolution of the AC MO dated 13.12.2019 in case No. A40-111878/2017
2 option — conclude a tripartite agreement: This option, in our opinion, is the safest of all the ones we are covering today. Why. It is because there are several important aspects in one document at once: the first is consent, the second is all the terms and conditions, and the third is seeing the will of the three parties. However, it is worth considering that there is one disadvantage for the creditor — in this case, it will be impossible for him to withdraw his consent.
Also our recommendation to you: make sure that the agreement on the transfer of debt was drawn up in the same form as the transaction from which the circumstance arose: simple written or notarized. If the transaction was registered at the Federal Register Office, then the agreement must also be registered.
3 option — include the conditions without which the agreement is recognized as non-concluded or invalid. We advise you to check whether all mandatory conditions have been included. Without some of them the risk of a challenge increases, without others it will be recognized as non-concluded.
- Specify the circumstance from which the debt arose, its amount, whether the obligation is transferred in full or only partially, in case the original debtor has already partially performed it or in case the parties want to transfer part of the debt. It is important to specify the obligation, it is an essential condition, without which the debt transfer agreement will be considered non-concluded. However, it is important to keep in mind that the original debtor is only entitled to transfer the penalty.
- Specify the consideration of the agreement: it is not necessarily the fact that the new debtor receives money from the former debtor, the benefit may be other, for example, offsetting the debt. We note that this applies to private transfers of debt and to persons connected by intra-group relations. We would like to mention separately that in the case of a private debt transfer, the new debtor is obliged to repay the debt to the creditor, without having the right to waive the debt due to non-reimbursement from the original debtor. In any case, the most important thing is that the economic sense for the new debtor is clear, otherwise there is a risk that the agreement will be challenged, especially in case of bankruptcy. Also an important point is that gifts between commercial organizations are prohibited.
- It is advisable to specify the economic benefit in debt transfer agreements, even if the parties are individuals, in order to protect the agreement from possible challenge. To take an example, individuals have entered into debt transfer agreements under loan agreements totaling more than 54 million roubles. The lender under all loan agreements is the same legal entity. The creditor was declared bankrupt, and the bankruptcy trustee filed an application to invalidate the debt transfer agreements. The court granted his claims. It explained: «an ordinary debt transfer transaction implies that the original debtor pays for the ‘opportunity’ not to fulfill its obligations, but the terms of the disputed agreement do not provide for remuneration».
Option 4 — Choose one of the two options for debtors’ liability. At the moment there are 2 options as to how the new debtor will repay the debt — jointly with the former debtor or on their own.
Firstly, you can set up a private debt transfer. What does that mean? In a case where the entire liability is fully transferred to the new debtor and the original debtor is out of the obligation. In the case when the parties have signed an agreement on the transfer of debt and have not chosen the type of liability — a private transfer of debt will be assumed. But under this circumstance, the debtor will not receive subrogation or recourse rights to the original debtor, regardless of whether the original debtor paid him for the debt transfer or not. Separately, we recommend you to take into account the position of the Supreme Court, according to which there is no monetary remuneration in a privative transfer of debt from the original debtor to the new debtor, and there is no evidence of the new debtor’s desire to remunerate the original debtor. Instead, the recoverability of such a transaction may arise from other circumstances, such as intra-group relations between the original and new debtors.
Secondly, enshrine a cumulative transfer of debt. In this case, the original debtor will remain obligated. By default, the parties will be jointly and severally liable; a cumulative transfer of debt is similar to a surety. The Supreme Court stated that when it is not clear what the creditor and the debtor, who are engaged in entrepreneurial activity, have agreed upon: cumulative transfer of debt or suretyship, it is necessary to proceed from the position that their agreement is a contract of suretyship. But in the agreement you have the right to provide for vicarious liability, where the original debtor will only repay the debt if the new debtor fails to do so.