Debt Repayment Agreement Template

Debt Repayment Agreement Template

This Debt Repayment Agreement (“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 may each be referred to as a “Party” and together as the “Parties.”

1. Acknowledgment of Debt

1.1 Existing Debt. Debtor acknowledges owing Creditor a total outstanding amount of [Total Amount in Numbers and Currency] ([Total Amount in Words]) (the “Debt”).

1.2 Origin of Debt. The Debt arises from the following obligations:
[Short description, e.g., “unpaid invoices for goods/services,” “loan of funds on [date],” “credit account balance,” etc.]

1.3 No Current Dispute. Debtor confirms that, as of the Effective Date, Debtor does not dispute the existence or principal amount of the Debt described in this Agreement.

2. Settlement Amount (If Different From Original Debt)

2.1 Agreed Repayment / Settlement Amount. The Parties agree that the amount to be repaid under this Agreement (the “Repayment Amount”) is:

• Repayment Amount: [Amount and Currency]

2.2 Forgiven Balance (If Any). If the Repayment Amount is less than the total Debt, the remaining amount of [Amount and Currency or “N/A”] (“Forgiven Amount”) shall be forgiven only if Debtor fully and timely complies with this Agreement.

2.3 Effect of Default. If Debtor defaults under this Agreement and does not cure the default as allowed in Section 7, Creditor may treat the original Debt (minus any payments actually received) as immediately due and owing, including any amounts that would otherwise have been forgiven, to the extent allowed by law.

3. Payment Terms and Schedule

3.1 Payment Method. Debtor shall make all payments in [Currency] via [bank transfer / check / electronic transfer / other] to the following 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: [Reference to include on payments]

3.2 Repayment Schedule. Debtor agrees to pay the Repayment Amount as follows (select one option and complete):

Option A – Lump-Sum Repayment
Debtor shall pay the full Repayment Amount on or before [Due Date].

Option B – Installment Plan
Debtor shall pay the Repayment Amount in installments as follows:

• Number of Installments: [Number]

• Amount of Each Installment: [Amount and Currency]

• Due Dates: [e.g., “on the [Day] of each month, beginning [Start Date] and ending [End Date]”]

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

4. Interest and Charges (Optional)

4.1 Interest on Outstanding Balance. The outstanding principal balance of the Repayment Amount will bear interest at the rate of [Interest Rate]% per year, calculated on a [simple / compound] basis from [Interest Start Date] until paid in full.

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

4.3 Compliance with Legal Limits. If any agreed interest or charges exceed legal limits, they shall automatically be reduced to the maximum lawful amount, and any excess already paid shall be treated as a payment toward principal.

5. Security or Collateral (If Applicable)

5.1 Collateral. As security for Debtor’s obligations under this Agreement, Debtor grants Creditor a security interest in the following property (“Collateral”):
[Description of collateral, e.g., “Vehicle: [Year, Make, Model, VIN],” “Equipment: [Description],” etc.]

5.2 Additional Documentation. Debtor shall sign any additional documents reasonably required to perfect or record Creditor’s security interest in the Collateral, to the extent permitted by law.

5.3 Rights in Collateral. Unless Debtor defaults, Debtor may continue to use the Collateral in the ordinary course. Upon default, Creditor may exercise its rights in the Collateral in accordance with applicable law.

6. Representations and Covenants

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.

6.2 Cooperation. Debtor agrees to cooperate with Creditor in providing reasonably requested information concerning Debtor’s contact details and to promptly notify Creditor of any change in address, email, or phone number.

7. Default and Creditor’s Remedies

7.1 Events of Default. Debtor will be in default under this Agreement if:

• Debtor fails to pay any installment within [Number] days after its due date; or

• Debtor materially breaches any other provision of this Agreement and does not cure the breach within [Number] days after written notice from Creditor.

7.2 Acceleration. Upon default, Creditor may, by written notice to Debtor, declare the entire unpaid balance of the Repayment Amount (and, if applicable, any portion of the original Debt that was to be forgiven) immediately due and payable, subject to applicable law.

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

8. Release and Waiver (If Debt Is Fully Paid)

8.1 Release Upon Full Performance. Upon Debtor’s full and timely payment of the Repayment Amount and any interest and fees due under this Agreement, Creditor shall:

• Mark the Debt as “paid in full” under this Agreement; and

• Release any security interest in the Collateral (if any), by signing any reasonable release documents.

8.2 Scope of Release. If the Debt included a Forgiven Amount, that portion shall be permanently forgiven once Debtor has fully complied with this Agreement, and Creditor will not pursue further collection of the Forgiven Amount.

9. Notices

9.1 Form of Notice. Any formal notice under this Agreement must be in writing and delivered by hand, mail, courier, or email to the contact details for each Party set out at the beginning of this Agreement, or to any updated details provided in writing.

9.2 Effective Date of Notice. Notices will be deemed received on the date of actual delivery or, in the case of email, on the date sent if there is no bounce-back or error message.

10. Governing Law and Dispute Resolution

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

10.2 Dispute Resolution. If a dispute arises out of or in connection with this Agreement, the Parties shall first try in good faith to resolve it through informal discussions. If they cannot resolve the dispute within [Number] days after one Party gives written notice of the dispute, either Party may pursue [court proceedings / mediation / arbitration] in [City, State/Province, Country].

11. Miscellaneous

11.1 Entire Agreement. This Agreement constitutes the entire understanding between the Parties regarding the Debt and its repayment and supersedes any prior oral or written agreements about the same Debt.

11.2 Amendments. Any change to this Agreement (including changes to the payment schedule or amounts) must be in writing and signed by both Parties.

11.3 No Waiver. If either Party does not enforce any right under this Agreement, it does not mean that Party has waived that right for the future.

11.4 Severability. If any provision of this Agreement is found invalid or unenforceable, the remaining provisions will remain in full force and effect.

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

11.6 Counterparts and Electronic Signatures. This Agreement may be executed in counterparts. Signatures transmitted electronically (including scanned or digital signatures) shall be treated as originals.

12. Signatures

IN WITNESS WHEREOF, the Parties have executed this Debt Repayment Agreement 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]