If your lender agrees that you can pay off a debt for less than you owe, you`ll need a written agreement that includes information about the debt, what is expected of you, how much will be forgiven, and what the repayment terms are. If your lender doesn`t send an agreement, you can use this template to create a written agreement to make sure you`re both on the same page. Several pieces of information are needed to balance the wording of this Agreement. As a first step, we will bring together the parties who intend to conclude this contract. First, we identify the creditor. That is, the party that holds the debt. Note the legal name of the creditor in the first space of the first paragraph. Then document the creditor`s address with the second empty line. Finally, the third and fourth vacancies require the city and state associated with the creditor`s civic address. Then we identify the debtor. This is the party who is required to pay the debt owed to the creditor. We need to document the same information that is reported about the creditor in the rest of this paragraph.
Find the fifth space in this paragraph and document the debtor`s full name on it. Continue the accounts receivable report with their address, city and country of residence in sixth, seventh and eighth places. Several other areas also require information, starting with “I. Effective Date”. This is the date on which the terms of this Agreement become active or effective. Note the name of the month, the double-digit day, and the year of the first calendar day this contract becomes active. Then, in “II. Current debts”, we need to document the entire current debt that the debtor is required to pay to the creditor. Use the blank line after the dollar sign in this statement to record this amount of money. The third point, “III. Settlement debt”, requires the adjusted amount of debt established for the purposes of this document, which is made available on the white line. This is the amount of money that the debtor has agreed to pay in the manner set out in this document in exchange for debt relief from the creditor.
Enter this amount in the blank line after the dollar sign in this section. The section entitled “IV. The payment was formulated in such a way as to consolidate the manner in which the settlement amount is to be paid to the debtor. A number of checkboxes have been provided so that this can be done effectively. Select the Check, Bank Transfer, Certified Check, or Cash check box to specify how the debtor must pay the creditor. If none of them define how this settlement amount is to be paid, check the “Other” box and indicate the payment instructions that the creditor expects from the debtor when submitting the required payment. The following sentence on this point is intended to consolidate the date on which the creditor is to receive the amount of the debtor`s composition. Look for the blank line for the words “. Settlement debt amount By ” then enter the name of the month and the two-digit calendar day on which the creditor is to receive this payment. Then, in the blank line, note the two-digit calendar year for that date. The next area that requires special attention is “XII. Applicable law”.
Use the blank line in this point to indicate the state in which the terms of this Agreement are governed and enforced. The terms and number of payments to be made, including the interest rate that will be charged (if you do not make a lump sum statement); Postal payment. Once the payment has been made by the debtor, the creditor makes every effort to withdraw the unpaid debts of the credit reference agencies. In addition, the creditor declares that it will not provide any additional information that could harm the debtor`s credit report. 4. The creditor undertakes to accept a settlement payment of the debt of _____________________als the full payment and satisfaction of the current debt. Upon acceptance of payment of the debt settlement, creditor will a) fully settle the current debt, b) update/modify its internal records to mark the accounts receivable associated with the debt as fully paid, and c) make every effort to notify all credit reference agencies that the accounts receivable associated with the debt is marked as fully paid. After payment – Once the last payment is made, the creditor agrees to remove all harmful bookings from the debtor`s credit report. -Instalment payments: [Specify the number of payments, amounts and due dates] In a 2015 note, we discussed the law on the subject at the time and suggested how to design an agreement that would withstand challenge. The recent decision in Red & White Distribution, LLC v. Osteroid Enterprises, LLC, 2019 DJDAR 7516 (August 9, 2019), confirms our advice and provides a roadmap.
If you have negotiated a settlement with a creditor, you can use this template to get the terms of the agreement in writing. You can customize this template to meet the needs of both parties. If you want to make sure your agreement is legally binding, feel free to have it drafted by a lawyer or review your copy. You may also have other useful legal advice regarding your debt settlement agreement. Debt regulation can help you find debt relief and get your personal finances in order, so be sure to follow the guidelines outlined here. If the debtor fails to make payment by the above due date, this Agreement will become immediately invalid. After negotiating a debt settlement with a creditor, para. B example a credit card company, you must formalize your agreement in writing. You can write the agreement yourself and send two copies to your creditor so they can return a signed copy to you. Or it may be easier to ask your creditor to write a letter and send it to you.
Many creditors will do this automatically. Debt settlement. Between the parties, it is presumed that the debtor has an unpaid debt to the creditor. In the mutual interest of the parties, they agree that such outstanding debt will be marked as paid if the debtor makes the payment of ___ $ to __ You may supplement, delete or modify the information contained in this Agreement according to your situation. The letter of agreement can be simple or complex, depending on your particular financial situation and the type of debt you owe. The error in the red and white settlement agreement stated that the defendant was “required to pay the [plaintiff] $2,100,000.00 (`Total Payment Plan Amount`) plus interest.” The court is aware of the language required to avoid this problem. “The parties could have included in the agreement terms stating that [the defendant] is required to pay the [plaintiff] $2.8 million, but as long as all payments are made on time in accordance with the payment schedule, the amount due will be discounted to $2.1 million.” Finally, an appeal decision from California gave clear instructions on how to draft a settlement agreement with payments backed by a decision that will be taken to court. .