Payment Arrangement Agreement Template

Payment Arrangement Agreement Template

This Payment Arrangement 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 Existing Debt

1.1 Existing Obligation.
Debtor acknowledges owing money to Creditor in connection with the following obligation:

• Type of obligation: [e.g., “unpaid invoices for goods/services,” “loan agreement,” “credit account,” “rent arrears”]

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

• Related invoice numbers and dates (if any): [Invoice No. and Date]

1.2 Outstanding Amount.
As of the Effective Date, the total outstanding amount before this Agreement is:

• Principal outstanding: [Currency and Amount]

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

• Total outstanding balance: [Currency and Amount]

1.3 Acknowledgment of Debt.
Debtor acknowledges that, as of the Effective Date, the above debt is valid and owing and is not currently disputed.

2. Agreed Repayment / Settlement Amount

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

[Currency and Amount]

2.2 Difference from Original Balance (if any).
If the Repayment Amount is less than the total outstanding balance in Section 1.2, the difference of [Currency and Amount or “N/A”] (“Conditional Waiver Amount”) will be handled as follows:

• The Conditional Waiver Amount will be permanently forgiven only if Debtor fully and timely complies with this Agreement; and

• If Debtor defaults, Creditor may treat the entire original balance (minus any payments actually received) as due, including amounts that would otherwise have been forgiven, to the extent allowed by law.

3. Payment Schedule and Method

3.1 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]

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

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

• Installment amount: [Currency and Amount]

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

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

4. Interest and Late Charges (Optional)

4.1 Interest on Outstanding 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 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 Amounts.
Upon default, Creditor may, by written notice to Debtor, declare:

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

• Any Conditional Waiver Amount 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 Under This Agreement.
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” in Creditor’s records; and

• Release any security interest or lien provided solely for this debt (if any), by signing any reasonable release documents.

6.2 Forgiveness of Waived Amount (if applicable).
If the Parties agreed to a Conditional Waiver Amount, that portion of the original debt 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 the debt other than those written in this 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 contact details 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 debt and the payment arrangement described above. It replaces all prior oral or written discussions about the same amounts.

10.2 Amendments.
Any change to this Agreement (including changes to the payment schedule, interest, or waiver terms) 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 future situations.

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 underlying 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 originals for all purposes.

11. Signatures

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