Protection of Credit

If, in a debt, the creditor issues a receipt after he accepts the principal without reservation regarding the interest there is a rebuttable presumption that the interest and/or prior installments were already paid by the debtor. This complements Art. 1253 of the Civil Code, which states that payment of the principal amount in a debt that bears interest will not be considered made until the interest itself has been paid as well.The creditor can protect himself with the following remedies:

1.) Exhaustion of the debtor's property (ex. reimbursement, attachment or execution of judgment)

2.) Accion subrogatoria -to be subrogated to all the debtor's rights and actions except those that are inherent in his person (i.e. the right to demand and collect unpaid credit from third persons who owe the debtor and haven't paid him yet)

3.) Accion pauliana -the creditor files an action to rescind the acts or contracts the debtor enters into to defraud him

Actions 2 and 3 are subsidiary to 1. Regarding accion subrogatoria, the creditor can't pursue subrogatory actions on the debtor's behalf which are personal to the debtor, like revoking a donation because of ingratitude, exercising parental authority over the debtor's children, revoking the debtor's will, etc. Accion pauliana has a criminal counterpart called fraudulent insolvency.

Rights acquired by virtue of an obligation are transmissible in character except:

1.) Their nature won't allow them to be transferred (like purely personal rights)

2.) The parties stipulate that they can't be transferred

3.) They're not transmissible by operation of law