Late Payment Agreement Template

Late Payment Agreement Template

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

Creditor:
[Creditor Legal Name]
[Entity Type or “Individual”]
[Street Address]
[City, State/Province, ZIP/Postal Code, Country]
Email: [Creditor Email]
Phone: [Creditor Phone Number]

Debtor:
[Debtor Legal Name]
[Entity Type or “Individual”]
[Street 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. Background and Acknowledgment of Debt

1.1 Existing Obligation.
Debtor acknowledges that amounts are currently overdue and payable to Creditor in connection with the following:

• Type of obligation: [e.g., “unpaid invoices for goods/services,” “loan agreement,” “service contract”]

• Original agreement or account reference: [Contract / Account / Loan / Purchase Order No.]

• Related invoice numbers and dates: [Invoice No. and Date]

1.2 Outstanding Amount.
As of the Effective Date, the total overdue amount owed to Creditor is:

• Principal outstanding: [Currency and Amount]

• Accrued late fees and/or interest (if any): [Currency and Amount]

• Total outstanding balance: [Currency and Amount]

1.3 No Current Dispute.
Debtor acknowledges that the above balance is valid and owing and that Debtor does not currently dispute the existence or principal amount of this debt.

2. Revised Payment and Settlement Terms

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

[Currency and Amount]

2.2 Waived or Reduced Charges (if applicable).
The Parties agree that:

• Original total outstanding balance: [Currency and Amount]

• Portion waived or reduced (if any): [Currency and Amount]

• Condition for waiver: Full and timely performance of this Agreement by Debtor

Any waived amount shall only be permanently forgiven after Debtor has paid the full Repayment Amount and complied with all obligations under this Agreement.

2.3 Payment Method.
Debtor shall make all payments in [Currency] by [Bank Transfer / Check / Electronic Transfer / Other] to:

• Account Name: [Account Name]

• Bank Name: [Bank Name]

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

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

• Payment reference: [Reference Debtor should include]

3. Payment Schedule

3.1 Down Payment (if any).
Debtor shall pay an initial payment of [Currency and Amount] on or before [Date]. This payment will be credited toward the Repayment Amount.

3.2 Installment Plan.
The remaining balance of [Currency and Amount] shall be paid in [Number] installments as follows:

• Installment amount: [Currency and Amount]

• Due dates for installments: [e.g., “on the [Day] of each month, starting [First Due Date] and ending [Final Due Date]”]

3.3 Application of Payments.
Unless required otherwise by law, Creditor may apply each payment first to any accrued interest or late fees under this Agreement and then to the remaining principal portion of the Repayment Amount.

4. Interest and Ongoing Late Charges

4.1 Interest on Remaining Balance (if applicable).
The unpaid portion of the Repayment Amount shall bear interest at [Interest Rate]% per year, calculated on a [simple / compound] basis from [Start Date] until paid in full.

4.2 Additional Late Fees (if applicable).
If any payment under this Agreement is not received within [Number] days after its due date, Debtor shall pay a late fee of [Currency and Amount or Percentage of installment], subject to applicable legal limits.

4.3 Legal Limits.
If any interest or charges under this Agreement exceed the maximum permitted by applicable law, they shall automatically be reduced to that maximum, and any excess already paid shall be treated as a payment toward principal.

5. Default and Consequences

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

• Any payment remains unpaid more than [Number] days after its due date; or

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

5.2 Acceleration of Debt.
Upon default, Creditor may, by written notice to Debtor, declare:

• All unpaid portions of the Repayment Amount immediately due and payable; and

• Any previously waived charges or amounts described in Section 2.2 to be reinstated and immediately due, to the extent permitted by law.

5.3 Collection Costs.
If Debtor is in default and Creditor reasonably incurs costs to collect overdue amounts, Debtor shall pay reasonable collection costs, including reasonable attorney’s fees and court costs, to the extent allowed by law.

6. Effect of Full Performance and Release

6.1 Paid in Full.
Upon Debtor’s full and timely payment of the Repayment Amount, together with any interest and fees due under this Agreement, Creditor shall:

• Mark the debt covered by this Agreement as “paid in full” for Creditor’s records; and

• Confirm in writing that no further amounts are owed under the original overdue balance, except as may be separately agreed for future business.

6.2 Waiver of Remaining Amounts.
If the Parties have agreed to waive any portion of the original balance, that portion shall be permanently forgiven once Debtor has fully complied with this Agreement and made all required payments.

7. Representations and Covenants

7.1 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 about this debt other than those contained in this written Agreement.

7.2 Creditor Representations.
Creditor represents that Creditor has the right to receive payment of the debt described in this Agreement and to enter into this Agreement with Debtor.

7.3 Contact Information.
Each Party shall promptly notify the other in writing of any change in mailing address, email address, or telephone number used for notices under this Agreement.

8. Notices

8.1 Form of Notice.
Any formal notice under this Agreement shall be in writing and delivered by hand, courier, mail, or email to the addresses shown at the beginning of this Agreement, or to any updated address provided in writing by a Party.

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

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 conflict-of-law rules.

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

10. Miscellaneous

10.1 Entire Agreement.
This Agreement represents the entire understanding between the Parties regarding the overdue debt and its revised repayment. It replaces all prior oral or written discussions about the same overdue amounts.

10.2 Amendments.
Any change to this Agreement must be in writing and signed by both Parties.

10.3 No Waiver.
If either Party does not enforce any right under this Agreement, that shall not be considered a waiver of that right in the future.

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

10.5 Assignment.
Debtor may not assign or transfer 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.

10.6 Counterparts and Electronic Signatures.
This Agreement may be signed in counterparts, each of which is considered an original. Electronic or scanned signatures shall be treated as original signatures for all purposes.

11. Signatures

IN WITNESS WHEREOF, the Parties have executed this Late Payment 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]