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A Debt Assumption Agreement lets one party take over another's debt obligations, effectively becoming the new debtor. Under Danish contract law, this three-way agreement requires consent from the original debtor, the new debtor, and the creditor to legally transfer the debt responsibility.

Danish businesses often use these agreements during mergers, acquisitions, or corporate restructuring. The agreement must clearly outline the debt terms, payment schedules, and any specific conditions required by Danish financial regulations. It offers creditors continued security while allowing companies to redistribute their financial obligations strategically.

Use a Debt Assumption Agreement when transferring debt obligations during business restructuring or property transactions in Denmark. It's particularly valuable during corporate mergers where one company needs to take over another's loans, or when selling property with existing mortgage debt that the buyer agrees to assume.

The agreement proves essential for Danish family businesses handling generational transfers, commercial landlords restructuring property portfolios, and companies acquiring subsidiaries with existing credit lines. Danish law requires explicit documentation of these debt transfers to protect all parties' interests and maintain clear financial obligations under the Danish Contracts Act.

• Basic Debt Transfer: Simple agreements for straightforward debt transfers between Danish parties, typically used in smaller transactions or family arrangements
• Corporate Assumption Agreement: Complex versions for business mergers and acquisitions, including detailed financial terms and corporate guarantees
• Property-Related Transfer: Specialized agreements for real estate transactions, addressing mortgage assumptions under Danish property law
• Conditional Assumption: Agreements with specific performance requirements or milestone-based debt transfers
• Partial Debt Transfer: Structured for situations where only a portion of the debt obligation transfers to the new debtor

• Original Debtor: The party seeking to transfer their debt obligations, often a business owner selling property or a company undergoing restructuring
• New Debtor: The party taking on the debt responsibility, typically a business buyer or acquiring company under Danish commercial law
• Creditor: The bank, financial institution, or lender who must approve the debt transfer and maintain their security interests
• Legal Advisors: Danish corporate lawyers who structure and draft the agreement to ensure compliance with financial regulations
• Financial Officers: Company CFOs and controllers who review terms and validate financial capacity

• Debt Details: Gather complete information about the original debt, including principal amount, interest rates, and payment terms
• Party Information: Collect legal names, business registration numbers, and contact details for all parties involved
• Financial Documentation: Obtain current debt statements, payment histories, and any existing security agreements
• Creditor Approval: Secure written consent from the creditor for the debt transfer under Danish law
• Transfer Terms: Define specific conditions, timing, and any modifications to the original debt terms
• Security Arrangements: Document any new collateral or guarantees required by Danish financial regulations

• Party Identification: Full legal names, addresses, and registration numbers of original debtor, new debtor, and creditor
• Debt Description: Detailed specification of the debt being transferred, including amount, interest rates, and payment terms
• Transfer Terms: Clear statement of the debt assumption and release of original debtor's obligations
• Creditor Consent: Explicit approval from the creditor as required by Danish contract law
• Security Provisions: Details of any collateral or guarantees maintaining the debt's security
• Governing Law: Statement confirming Danish law applies and jurisdiction for dispute resolution
• Signatures: Dated signatures from all three parties with proper attestation

A Debt Assumption Agreement differs significantly from a Debt Settlement Agreement in both purpose and effect under Danish law. While both deal with debt obligations, they serve distinct functions in financial transactions.

• Purpose: Debt Assumption Agreements transfer existing debt obligations to a new debtor, keeping the original terms intact. Debt Settlement Agreements modify or resolve existing debt, often reducing the amount owed
• Parties Involved: Assumption requires three parties (original debtor, new debtor, creditor), while settlement typically involves just the original debtor and creditor
• Legal Effect: Assumption maintains the full debt obligation but changes who pays it. Settlement usually results in partial debt forgiveness or modified payment terms
• Timing: Assumption occurs during business transfers or property sales, while settlement typically happens when dealing with troubled debt or financial hardship