Agreement to Pay Template: Payment Terms, Schedule & Late Fees

Agreement to Pay Template

This Agreement to Pay (“Agreement”) is made as of [Date] (“Effective Date”) by and between:

Creditor:

[Creditor Legal Name]

[Entity Type or “Individual”]

[Address]

[City, State/Province, ZIP/Postal Code, Country]

Email: [Creditor Email]

Phone: [Creditor Phone Number]

Debtor:

[Debtor Legal Name]

[Entity Type or “Individual”]

[Address]

[City, State/Province, ZIP/Postal Code, Country]

Email: [Debtor Email]

Phone: [Debtor Phone Number]

Creditor and Debtor are each a “Party” and together the “Parties.”

1. Acknowledgment of Debt

1.1 Amount Owed. Debtor acknowledges that Debtor owes Creditor the total amount of [Total Amount in Numbers and Currency] ([Total Amount in Words]) (the “Debt”).

1.2 Reason for Debt. The Debt arises from [Short Description of Reason, such as “unpaid invoice,” “loan of funds,” “goods delivered,” or “services provided”] on or about [Relevant Date(s)].

1.3 No Dispute. Debtor confirms that the Debt is valid and owing and that Debtor does not currently dispute the existence or amount of the Debt.

2. Payment Terms

2.1 Payment Method. Debtor shall make all payments to Creditor by [Bank Transfer / Check / Electronic Transfer / Other] to the following payment details, unless Creditor provides updated details in writing:

• Account Name: [Account Name]

• Bank Name: [Bank Name]

• Account Number / IBAN: [Account Number / IBAN]

• SWIFT / BIC (if applicable): [SWIFT/BIC]

• Payment Reference: [Payment Reference]

Account Name: [Account Name]

Bank Name: [Bank Name]

Account Number / IBAN: [Account Number / IBAN]

SWIFT / BIC (if applicable): [SWIFT/BIC]

Payment Reference: [Payment Reference]

2.2 Repayment Schedule. Debtor agrees to pay the Debt as follows (select one and complete):

• Single Lump-Sum Payment:

  Debtor will pay the full Debt on or before [Due Date].

  OR

• Installment Payments:

  (a) Number of Installments: [Number of Installments]

  (b) Amount of Each Installment: [Installment Amount in Numbers and Currency]

  (c) Due Date for Each Installment: [e.g., “on the [Day] of each month, beginning [Start Date] and ending [End Date]”]

Single Lump-Sum Payment:

Debtor will pay the full Debt on or before [Due Date].

OR

Installment Payments:

(a) Number of Installments: [Number of Installments]

(b) Amount of Each Installment: [Installment Amount in Numbers and Currency]

(c) Due Date for Each Installment: [e.g., “on the [Day] of each month, beginning [Start Date] and ending [End Date]”]

2.3 Application of Payments. Unless otherwise required by law, Creditor may apply each payment first to any accrued interest or fees (if applicable) and then to the remaining principal balance of the Debt.

3. Interest and Late Fees (Optional)

3.1 Interest. The Parties agree that the outstanding principal balance will bear interest at a rate of [Interest Rate]% per year, calculated on [Simple / Compound] basis, starting from [Interest Start Date].

3.2 Late Fees. If any payment is not received within [Number] days after its due date, Debtor shall pay a late fee of [Late Fee Amount or Percentage] for each late payment, subject to any applicable legal limits.

3.3 Compliance with Law. If the agreed interest or fees exceed any limit set by applicable law, they shall automatically be reduced to the maximum lawful amount.

4. Default and Remedies

4.1 Default. Debtor will be in default under this Agreement if:

• Debtor fails to pay any amount due under this Agreement within [Number] days after the due date; or

• Debtor breaches any other material obligation under this Agreement and does not fix the breach within [Number] days after receiving written notice from Creditor.

Debtor fails to pay any amount due under this Agreement within [Number] days after the due date; or

Debtor breaches any other material obligation under this Agreement and does not fix the breach within [Number] days after receiving written notice from Creditor.

4.2 Acceleration. Upon default, Creditor may, by written notice to Debtor, declare the entire remaining unpaid balance of the Debt, together with any accrued interest and fees, immediately due and payable.

4.3 Collection Costs. If Creditor reasonably incurs costs to collect unpaid amounts after default, Debtor agrees to pay reasonable collection costs, including reasonable attorney’s fees and court costs, to the extent permitted by law.

5. Security or Collateral (If Applicable)

5.1 Collateral. As additional security for the Debt, Debtor grants Creditor a security interest in the following property (“Collateral”):

[Collateral Description]

5.2 Security Agreement. If required by law or practice, the Parties may sign a separate security agreement or registration forms to perfect Creditor’s interest in the Collateral.

5.3 Use and Possession. Unless and until Debtor is in default, Debtor may continue to use and possess the Collateral in the ordinary course. In the event of default, Creditor may enforce its rights in the Collateral in accordance with applicable law.

6. Representations and Warranties

6.1 Debtor Representations. Debtor represents that:

• Debtor has read and understands this Agreement;

• Debtor has the legal capacity and authority to enter into this Agreement; and

• Debtor is not relying on any promises or statements other than those written in this Agreement.

Debtor has read and understands this Agreement;

Debtor has the legal capacity and authority to enter into this Agreement; and

Debtor is not relying on any promises or statements other than those written in this Agreement.

6.2 Creditor Representations. Creditor represents that Creditor has the right to receive payment of the Debt and to enter into this Agreement.

7. Amendments and Payment Changes

7.1 Changes in Schedule. Any change to the repayment schedule, interest, or fees must be agreed in writing and signed by both Parties.

7.2 Partial Payments. Acceptance of a partial payment by Creditor does not waive any right to declare default or to require full performance under the original terms unless Creditor agrees otherwise in writing.

8. Notices

8.1 Form of Notice. All formal notices under this Agreement shall be in writing and may be delivered by hand, mail, or email to the addresses shown at the beginning of this Agreement or to any updated address provided in writing.

8.2 Effective Date of Notice. Notices are effective when received or, in the case of email, when successfully sent without a bounce-back or error message.

9. Governing Law and Dispute Resolution

9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of [State/Province, Country], without regard to its conflict-of-laws rules.

9.2 Dispute Resolution. If a dispute arises regarding this Agreement, the Parties shall first attempt to resolve it in good faith through informal discussions. If no resolution is reached within [Number] days, either Party may pursue [Court Proceedings / Mediation / Arbitration] in [Location or Jurisdiction].

10. Miscellaneous

10.1 Entire Agreement. This Agreement contains the entire understanding between the Parties regarding the Debt and replaces any prior oral or written discussions about it.

10.2 Severability. If any part of this Agreement is found to be invalid or unenforceable, the rest of the Agreement will remain in full force and effect.

10.3 No Waiver. If either Party does not enforce a right under this Agreement, it does not mean that the Party has given up that right for the future.

10.4 Assignment. Debtor may not assign this Agreement or transfer obligations under it without Creditor’s written consent. Creditor may assign this Agreement or the Debt in accordance with applicable law, upon written notice to Debtor.

10.5 Counterparts and Electronic Signatures. This Agreement may be signed in counterparts. Electronic or scanned signatures shall be treated as original signatures.

11. Signatures

IN WITNESS WHEREOF, the Parties have executed this Agreement to Pay as of the Effective Date written above.

Creditor

Signature: _________________________________

Name: [Creditor Signatory Name]

Title: [Title, if applicable]

Date: [Date]

Debtor

Signature: _________________________________

Name: [Debtor Signatory Name]

Title: [Title, if applicable]

Date: [Date]