Assignment of debt
Also known as: debt assignment, sold debt
The legal transfer of a creditor's right to collect a debt to another party, typically a debt buyer that purchases charged-off accounts in bulk. The new party steps into the original creditor's shoes but inherits all the consumer's defenses.
Full definition
Assignment of debt is the contractual transfer of a creditor's interest in a receivable to a third party. After a personal loan is charged off (typically at 180 days past due), the original lender often sells the account to a debt buyer for pennies on the dollar. The buyer can then collect, sue, and report to bureaus as if they were the original creditor. However, the consumer keeps every defense and counterclaim available against the original lender, plus FDCPA protections that did not apply to the original lender. A common debt-buyer weakness is incomplete chain-of-title documentation: when forced to prove the assignment in court or through debt validation, many buyers cannot, which can defeat the claim entirely.
- Written by
- Get Advance Loan Editorial Team
- Reviewed by
- Compliance Review
- Published
- January 15, 2026
- Last reviewed
- May 22, 2026
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- MLA (Military Lending Act)Federal law capping consumer-credit APRs to active-duty service members and their dependents at 36% (the Military APR, or MAPR).
- CFPB (Consumer Financial Protection Bureau)The federal agency that supervises and enforces consumer financial-protection laws across most U.S. lenders.
- TCPA (Telephone Consumer Protection Act)The federal law governing telemarketing calls and texts, including the prior-express-written-consent requirement for autodialed marketing.
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