Debt collection right, by which the obligee can request the obligor to pay a sum of money, has been increasingly valued thanks to its popularity and its capacity to meet the demand for convenient circulation in civil and commercial transactions, etc. The following article TNTP will answer questions from readers related to this topic.
The right of debt collection is a property right to secure the performance of a civil obligation. According to Article 105 of the Civil Code 2015, Property rights are one of four types of property including objects, money, valuable papers and property rights.
The right of debt collectionis a civil right recognized and protected by law, enabling the obligee to request the obligor to perform a property obligation towards him/her. This right can be understood as a right where the obligee requires the obligor to pay a sum of money or objects, including receivables, the right to demand payment and other rights arising from the contract or prescribed by law.
It can be seen that the right debt collection is a typical property, expressed in intangible form and only binding on the obligor in case the parties have entered into a civil transaction and the obligor has not yet fulfilled its payment obligations. If the debt has been paid, the obligee’s right of debt collection will terminate accordingly.
2. Legal provisions
2.1 Transfer of the right of Debt collection
According to the current law, the right of debt collection is a property right, whereby obligee can demand the obligor to pay the debt or be entitled to request a competent authority to force the obligor to make the payment.
Right of debt collection is transferable under the provisions on transfer of right to demand, in which the assignee will be the party to have the right of debt collection toward the obligor.
Transfer of right of debt collection will base on the following provisions:
Regarding the transfer:
Article 365 of Civil Code 2015 regulates as below:
“A party having the right to demand the performance of a civil obligation may transfer such right to demand to a subrogatee of the obligee as agreed…
Where a person having a right to demand transfers such right to a subrogatee, the subrogatee of the obligee shall become the person having the right to demand.…”
The following rights to demand are not transferable:
+ The right to demand support or the right to demand compensation for any damage resulting from harm to life, health, honor, dignity or reputation;
+ The obligee and the obligor agree that the right to demand may not be transferred;
+ Other cases prescribed by law.
The consent of the obligor is not required for the transfer of the right to demand. However, the assignor of the right to demand must notify the obligor in writing of such transfer, unless otherwise agreed.
The obligor has the right to refuse to perform the obligation:
Article 369 of the Civil Code stipulates: The obligor’s right to refuse:
“Where the obligor is not notified of the transfer of the right to demand or where the subrogatee of the obligee does not prove the authenticity of the transfer of the right to demand, the obligor has the right to refuse to perform the obligation with respect to the subrogatee of the obligee.
Where the obligor is not notified of the transfer of the right to demand and has already fulfilled the obligation with respect to the person having transferred the right to demand, the subrogatee of the obligee may not demand the obligor to perform the obligation with respect to that subrogate”.
2.2 Sale of Debt collection right
The right of Debt collection is also defined as a subject of sale contracts between the parties. Based on Article 450 of the Civil Code on the sale of property rights, right of debt collection is a property right that can be offered for sale. Currently, many businesses have engaged in debt trading activities.
2.3 Mortgage of Debt collection right
According to the Civil Code 2015 from Article 317 to Article 327 on the mortgage of property, Right of debt collection is an asset, which can be subject to mortgage in accordance with the provisions of this Code. Debt collection right is mortgaged to secure the performance of other civil obligations in the system of legal documents on registration of secured transactions.
Hopefully, with the above sharing of TNTP, readers can get an overview of the definition and legal provisions on debt collection right.