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Cession/Assignment in Favor of creditors – the process by which debtor transfer all the properties not subject to execution in favor of creditors is that the latter may sell them and thus, apply the proceeds to their credits; extinguish up to amount of net proceeds ( unless w/ contrary stipulation )
Kinds:
1. Legal – governed by the insolvency law
2. Voluntary – agreement of creditors
REQUISITES FOR VOLUNTARY ASSIGNMENT
a) More than 1 debt
b) More than 1 creditor
c) Complete or partial insolvency of debtor
d) Abandonment of all debtor’s property not exempt from execution
e) Acceptance or consent on the part of the creditors
EFFECTS:
a) Creditors do not become the owner; they are merely assignees with authority to sell
b) Debtor is released up to the amount of the net proceeds of the sale, unless there is a stipulation to the contrary
c) Creditors will collect credits in the order of preference agreed upon, or in default of agreement, in the order ordinarily established by law
Kinds:
1. Legal – governed by the insolvency law
2. Voluntary – agreement of creditors
REQUISITES FOR VOLUNTARY ASSIGNMENT
a) More than 1 debt
b) More than 1 creditor
c) Complete or partial insolvency of debtor
d) Abandonment of all debtor’s property not exempt from execution
e) Acceptance or consent on the part of the creditors
EFFECTS:
a) Creditors do not become the owner; they are merely assignees with authority to sell
b) Debtor is released up to the amount of the net proceeds of the sale, unless there is a stipulation to the contrary
c) Creditors will collect credits in the order of preference agreed upon, or in default of agreement, in the order ordinarily established by law
