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Debt Assumption Agreement Template for Germany

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Key Requirements PROMPT example:

Debt Assumption Agreement

"I need a Debt Assumption Agreement under German law where our subsidiary GmbH will assume a €5 million corporate loan from our parent company, with the transfer to be effective from March 1, 2025; the creditor is Deutsche Bank AG."

Document background
The Debt Assumption Agreement is a crucial document in German financial and corporate practice, primarily used when one party wishes to take over the debt obligations of another. This arrangement is specifically governed by the German Civil Code (BGB) §§ 414-418, which sets out the legal framework for debt assumption (Schuldübernahme). The document becomes necessary in various scenarios, including corporate restructurings, M&A transactions, or group reorganizations where debt obligations need to be transferred. It must detail the original debt relationship, the terms of assumption, any security arrangements, and obtain explicit creditor consent. The agreement is particularly important in ensuring legal certainty and compliance with German law requirements regarding the transfer of debt obligations, while protecting the interests of all parties involved.
Suggested Sections

1. Parties: Identification of the original debtor, the assuming party (new debtor), and the creditor

2. Background: Description of the original debt relationship and the circumstances leading to the debt assumption

3. Definitions: Definitions of key terms used throughout the agreement

4. Object of Assumption: Detailed description of the debt being assumed, including amount, origin, and current status

5. Assumption Declaration: Formal declaration of debt assumption and the effective date

6. Creditor's Consent: Documentation of the creditor's consent to the debt assumption

7. Rights and Obligations: Description of the rights and obligations of all parties following the assumption

8. Representations and Warranties: Essential representations and warranties from all parties

9. Notices: Provisions regarding how formal communications between parties should be made

10. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction

11. Severability: Standard clause addressing the severability of contract provisions

Optional Sections

1. Security Arrangements: Required when existing security interests need to be transferred or new security is being provided

2. Payment Terms: Include when specific payment arrangements between the original and new debtor need to be documented

3. Release of Original Debtor: Include when the original debtor is to be fully released from obligations

4. Conditions Precedent: Include when the assumption is subject to specific conditions being met

5. Regulatory Compliance: Required when the assumption needs specific regulatory approvals or notifications

6. Tax Provisions: Include when there are specific tax implications that need to be addressed

7. Information Rights: Include when ongoing information sharing between parties is required

8. Further Assurance: Include when additional actions may be needed to perfect the assumption

Suggested Schedules

1. Schedule 1 - Details of Assumed Debt: Comprehensive details of the debt being assumed, including payment history and current status

2. Schedule 2 - Existing Security Interests: Details of any existing security interests related to the debt

3. Schedule 3 - Required Consents: List of all required consents and their status

4. Schedule 4 - Payment Schedule: If applicable, detailed schedule of future payments

5. Appendix A - Form of Notice: Template for formal notices to be used under the agreement

6. Appendix B - Form of Creditor's Consent: Standard form for documenting creditor's consent

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions



































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Relevant Industries

Banking and Financial Services

Insurance

Real Estate

Manufacturing

Construction

Energy

Infrastructure

Telecommunications

Healthcare

Retail

Professional Services

Transportation and Logistics

Relevant Teams

Legal

Finance

Treasury

Corporate Development

Risk Management

Compliance

Corporate Secretariat

Credit

Mergers & Acquisitions

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Finance Manager

Legal Counsel

Corporate Lawyer

Risk Manager

Restructuring Officer

Financial Controller

Compliance Officer

Corporate Secretary

Credit Manager

Transaction Manager

Business Development Director

Mergers & Acquisitions Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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