An Acknowledgement of Debt is commonly referred to as an “AOD” and is an unequivocal admission of liability by a person (the “Debtor”) that he or she owes another person (the “Creditor”) money.
In a cession in security, the cedent transfers its right of action to a debt owed to it, known as the principal debt, to the cessionary as security for the debt owed by the cedent to the cessionary, known as the secured debt. A right of action is the legal standing to collect the principal debt. The ownership in the right, however, remains vested in the cedent despite the cession.
If a person (the “Debtor”) owes you (the “Cedent”) money, you have a personal right to claim the money from that person. This personal right to claim the money that is due to you can be “transferred” to another person (the “Cessionary”). The transfer of the personal right to claim the money from the Debtor takes place by way of cession. Once the cession has taken place, the Cessionary becomes the “owner” of the personal right and will be in the position to claim the money from the Debtor.