The Payment Agreement records the outstanding debts and sets out a payment plan for the Debtor to make the payments to the Creditor without any interruptions.

This template is drafted in favour of the Debtor. For instance, the Creditor grants an additional 30 day period to make payment in case of delay, and the Debtor will not be charged any late payment fee. The Agreement will be considered in default only if the payment is unpaid after the additional period granted by the Creditor. In the case of Default, the Creditor can recover only the outstanding debt amount and not accrued interest/attorney fees.

The Agreement includes:

(a) Acknowledgement of the debt 

(b) Payment Plan, i.e. a debt repayment schedule including the method of payment is outlined in Annexure A to the Agreement

(C) Late Payment 

(D) Consequences of default in payment 

How to use this Document?

A Creditor can use the Payment Agreement to outline the debt repayment schedule for the Debtor. 

The total debt amount, payment method, instalment amount and the due date should be specified in the Agreement. 

Both parties should sign and return a copy, and once signed, both parties should get a copy. Both parties may wish to have their signatures witnessed to avoid any future disputes.

The Creditor and the Debtor should carefully read this document.