Assignee and Assignor: What is the assignment of credits?

From JLA Notarios, experts in Commercial Law, we want to clarify who these figures are and what the assignment of credits is.

The assignee and assignor are the two parties involved in assignment contracts. Correctly identifying them is essential for the validity and effectiveness of the different legal transactions.

The assignor is the original creditor who holds the right to collect from a debtor and decides to transfer it to a third party, generally in exchange for a price or compensation.

The assignee acts as the new creditor who acquires ownership of the credit, subrogating all the rights, guarantees, and interests that the assignor had, unless otherwise agreed.

The assigned debtor is the one who holds the debt whose ownership is transferred between assignor and assignee (or original creditor and new creditor). The assignment means that the debtor must switch from paying the original creditor (assignor) to the new one (assignee). In the assignment of credits, this operation is transferred, which does not require the debtor's consent but it is necessary for them to receive a notification of the procedure, so they know to whom they must pay.

Both the assignee and the assignor must formalise a credit assignment agreement in writing, detailing the amount of the credit, the maturities and possible guarantees. With the credit assignment, the assignor is responsible for the enforceability and legitimacy of the assigned credit, while the assignee assumes the risk of collection.

Let us take an example of this legal transaction, initially regulated in the Civil Code.

1. In hereditary successions: A deceased person leaves the heirs an outstanding credit for rent of a flat. One of the heirs (assignor) needs liquidity and assigns their share to an investor (assignee) in exchange for that amount in cash. From the assignment of credits onwards, the debtor pays the assignee.
2. A married couple in community property receives rental income from tenants (debtor). In the couple's divorce, the wife (assignor) agrees with her ex-husband (assignee) to assign him the credit in exchange for him assuming the mortgage of the family home.
3. A company executes a construction of flats (assignor) and before completing the payments, assigns the credits to a factoring company (assignee) in exchange for an advance of the amount.

As we can see, the assignment of credits is common in factoring contracts, as these involve the assignment of credits to obtain immediate liquidity.

Published in 1889, the Civil Code already regulates the relationship between assignee and assignor, being governed by the articles between 1526 and 1537.

It is also covered in:

• the Commercial Code
• the Mortgage Law
• the Regulation of the Law on chattel mortgage and pledge without displacement of possession
• the regulations on Contracts in the public sector
• order EHA 3536/2025
• the Catalan Civil Code (book V)

It is only mandatory to go to a notary for the assignment of credits when processing an assignment of credits with a mortgage guarantee. In that case, it must be drafted in a public deed and registered in the Land Registry. It is also highly recommended to carry it out with the assignment of future credits (in anticipation of a credit that does not yet exist but is expected in the future).

And, although the rest of the procedures can be formalised in agreements between the assignee and assignor, the drafting of an assignment of credits act can be requested from a Notary. The fact of elevating the assignment of credits before a Notary gives the assigned credit executive force, which allows, if necessary to collect the credit due to non-payment, to go directly to the enforcement phase and avoid the declaratory phase.

Once the procedure has been carried out between the assignee and the assignor, the debtor must be notified to guarantee its effectiveness. In this way, if the debtor is unaware of this act and makes the periodic payment to their assignor (previous creditor), they would have no payment obligation to the assignee and would be released by paying the assignor, as they have fulfilled their obligation and could not otherwise be aware of the assignment.

For this reason, it is recommended to carry out the notification by burofax or notarial deed.