Trading in receivables - a broad overview

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Trading in receivables is becoming more and more common. The dynamic development of debt trading was caused by the operation of an increasing number of specialized debt collection companies, which in their activities demonstrate a much more effective debt recovery effect than non-professional entities.

Is trade in receivables allowed?

In our considerations on debt trading, let us focus on a very important issue, which is the exclusion of certain categories of debt from trade in debt.

One of the general principles of civil law is the principle of freedom of contract, under which it should be assumed that all debts can be traded within the limits of the law. In support of this statement, one can cite Art. 509 of the Civil Code, which states that: "the creditor may, without the consent of the debtor, transfer the claim to a third party (transfer), unless it would be contrary to the act, the contractual reservation or the property of the obligation".

As is usually the case, there are some exceptions to the general rule. Also in the case of trading in receivables, the legislator has formulated a catalog of receivables that have been excluded from trading by law.

Types of receivables excluded from trading

To better illustrate such claims, we will distinguish them using three categories:

1) Statutory restrictions include:

  • claims arising from the employment relationship (Article 84 of the Labor Code) - classic examples in this case may be: remuneration for work, commissions
  • rights that are not transferable under the Act - the right to repurchase (Civil Code Art.595), pre-emption right (Civil Code Art.602), personal easements (Civil Code Art.300), right to life imprisonment (Civil Code Art.912).
  • claims relating to personal injury (Civil Code Art. 444-448), in this case the exception is the claims due, recognized in writing or granted by a valid court decision.

2) Contractual restrictions:

These are limitations that result directly from the contract concluded between the debtor and the creditor. Usually, the restriction contained in such an agreement takes the form of a clause that excludes the possibility of transferring the receivable specified in the contract.

When writing such a clause, it is worth indicating Art. 514 of the Civil Code, constituting as if the basis for making an entry in the following wording: "if the claim is confirmed in a letter, the contractual reservation that the transfer cannot be made without the consent of the debtor, is effective against the buyer only if the letter contains a note about this reservation, unless the buyer he knew about the reservation at the time of the transfer. "

3) Limitations resulting from the nature of the obligation

In the case of a restriction resulting from the nature of the obligation, the type of legal relationship is of key importance, as some of the relationships are essentially focused on the performance of a service or a specifically designated entity (person). In such a case, this subjective obligation excludes the possibility of assignment of receivables pursuant to Art. 58 of the Civil Code. Examples of such legal relationships are: the maintenance obligation, the right to a pension. In the event of concluding an assignment contract, which is inconsistent with the property of the obligation, the obligation is considered invalid.

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