When you take out a credit contract, it is common for it to be accompanied by a debt assignment act. This guarantee, often referred to as “assignment of remuneration,” provides additional security to the lender in case of irregularities in the repayment of your credit. Our legal expert explains this widely used legal mechanism in credit matters.
Concept of Debt Assignment
The assignment of debt is an agreement by which the worker (debtor) transfers to the credit institution (creditor) the ownership of their claim (remuneration) held against their employer (assigned debtor).
By signing such an act, the consumer authorizes the credit institution to directly receive the seizable portion of the salary paid by the employer, without needing a prior judgment.
The employer can then only pay the remuneration to the credit institution.
If the employer does not take into account the assignment of remuneration and continues to pay directly to the worker without making the mandatory deductions, they will be required to pay a second time to the banker.
This is an application of the adage “who pays badly pays twice.”
Notification
The law states that the assignment of debt by authentic act is only enforceable against the assigned debtor from the moment it has been notified to the assigned debtor or recognized by them.
It is therefore sufficient for the credit institution to notify the assigned debtor by simple mail. The important thing is that the credit institution can reserve proof that it has indeed brought the assignment to the attention of the assigned debtor.
This is why registered mail is more often used in practice (see the bailiff’s exploit in some cases).
In the context of a private deed debt assignment, the law requires the credit institution to notify the assignor of its intention to execute the assignment of remuneration and to send the assigned debtor a copy of the notification made to the assignor.
Upon expiration of the opposition period, the credit institution must also send a copy of the assignment act to the assigned debtor.
It is not uncommon for the same claim to have been assigned several times to different credit institutions. In such a case, the rule of priority prevails. It is therefore the first credit institution that notifies the assignment that takes precedence.
Opposition
In the context of a private deed assignment, the assignor has a period of 10 days to file opposition from the date of sending the notification by the assignee.
The receipt of the opposition notification means that the assigned debtor can no longer make any deductions from the remuneration for the execution of the assignment.
In case of opposition, the assignee summons the assignor by registered letter sent by bailiff, before the justice of the peace of the canton of the assignor’s domicile to hear the assignment validated.
The justice of the peace rules as a last resort regardless of the amount of the assignment. In case of validation by the justice of the peace, the assignment can be executed by the assigned debtor upon simple notification made by the clerk within five days from the judgment.
Conversely, if the worker does not oppose the assignment of remuneration, the assignment will take effect from the notification of the certified copy of the assignment to the assigned debtor.
In the context of an authentic act assignment, the assignor does not have the possibility to oppose. They can limit themselves to taking legal action to request terms and deadlines or contest the authentic act.
Furthermore, for the implementation of the assignment of remuneration to be enforceable against third parties, the assignee must file a notice of assignment in the central notice file.
Recommendation
Pay your installments with seriousness and rigor to avoid such inconveniences. It is never pleasant to see your salary decrease every month. Be careful, borrowing money also costs money.