WHEREAS ,
the Debtor is indebted to the Creditor in the amount
of (Number) dollars ($ Numerical.Amount ) (the “Debt”); and
WHEREAS ,
the Debtor wishes to settle the Debt in full according
to the terms of this Debt Settlement Agreement.
NOW, THEREFORE,
In consideration of the mutual covenants and promises made by the parties hereto, the Debtor and the Creditor (individually, each a “Party” and collectively, the “Parties”) covenant and agree as follows:
Acknowledgment of debt The Debtor agrees and acknowledges that it is indebted to the Creditor in the full
amount of the Debt.
Settlement amount The Creditor agrees to accept from the Debtor, a total final payment amount
of (Number) Dollars ($ Numerical.Amount ) as full repayment of the out standing
Debt to the Creditor at the date hereof, subject to the terms and conditions of this Agreement. Payments shall be made according to the payment schedule outlined
in the section below titled “Terms of Payment.”
Timeliness The Parties agree and acknowledge that time is of the essence with regard
to the Debt Settlement Payments. This applies to signing the Agreement and to making
the payments according to the Agreement. If the Debtor does not sign the Agreement within ten (10) business days of receiving it, the Creditor may rescind the offer.
If the Debtor fails to make a payment as outlined in the terms of this agreement without communicating with the Creditor in advance, the Creditor may void the Agreement
if they choose.
Voiding the contract means that the settlement amount
is no longer valid, and the Debtor owes the full debt to the Creditor. It is at the sole discretion of the Creditor whether or not they void the Agreement if there is a breach of contract.
No modification unless in writing. No amendments are made to this Agreement unless completed in writing and agreed upon by both Parties. If both Parties cannot come to an agreement on amending the terms, then the Agreement should be carried out as it was originally written and signed.
Full integration This Debt Settlement Agreement supersedes any prior agreements, understandings, or negotiations, whether written or oral. In other words, this agreement is now the ontrolling agreement with regard to the Debt.
In the event that the terms of this agreement are different from any other documents signed previously, the terms of this agreement are the ones that will be used.
If you have concerns about a previous discussion with the Debtor, make sure you address them in the Agreement. Ensure that it is clear whether or not those discussion items are part of the terms. This is a great way to personalize the document and show your client that you’re listening to their concerns. For example, if the Debtor requests that their debt is reported as “paid in full” to the credit bureaus, you should address this issue in the terms. This helps you avoid any misunderstandings regarding the debt appearing on the Debtor’s credit report in the future.
Force majeure The Parties shall make any further assurances as may be necessary to implement
and carry out the intent of this Agreement. In other words, if needed, the Debtor and
the Creditor will take additional actions in order to ensure that the Debt will be settled
so long as the terms of this agreement are followed.
This section of the document refers to forces that are beyond either Party’s control. In the case that something happens affecting the terms of the Agreement, both the Debtor and the Creditor agree to work together and complete the terms of the contract. For example, if the Debtor may experience a financial loss that impacts their ability to make payments as scheduled. If the Debtor maintains contact with the Creditor about their circumstances, both parties should work together to reach the end goal of the contract, which is a debt that is paid in full as outlined by this Agreement.
Conditions If there are any conditions that affect the Agreement, they should be outlined as part
of the terms. Examples of conditions that may vary include enrollment fees, monthly account maintenance fees, or late payment fees.
If the debt settlement offer is contingent on the Debtor providing proof of financial need, pay statements, or other documentation, outline those expectations here. For example, you may allow a certain number of business days for the Debtor to provide those documents after both Parties sign the agreement. Alternatively, you may require that they provide documentation before signing to confirm their eligibility. If there are multiple contingencies, you can drag-and-drop a table to organize each condition and the corresponding expectation.
Governance This Debt Settlement Agreement and the interpretation of the terms herein shall
be interpreted in accordance with the governing laws of the State of [Debtor.State] .
The Parties irrevocably submit to the exclusive jurisdiction of the federal and state courts located in [Debtor.Country] County, [Debtor.State] .
You may have Debtors across many states. For ease
of managing your portfolio of debt settlement contracts,
list the same state on all of your agreements.
This ensures that you have an opportunity to study
and anticipate the interpretation of laws and write
the Agreement so that it is in line with your state’s expectations for financial matters.
Communication Both Parties are expected to maintain communication, especially in the case of any change s that affect the Agreement. This includes changes like the contact person
at the Creditor Company or the phone, email, or physical address of the Debtor.
Don’t assume that the Debtor knows they should
update their contact information with you. If you send correspondence regarding this Agreement to the wrong address, there may be a miscommunication about expectations between the Creditor and the Debtor.
Warranties The Creditor agrees to accept the settlement amount as payment in full for the account(s) in question. The Creditor will not sell the debt to a third-party collection agency as long as the Agreement is active and once it is considered complete.
Release terms The Creditor agrees that once the Agreement is fulfilled, they will no longer pursue
the original amount debt in full as agreed in the initial credit or loan agreement.
While the Creditor may maintain records of the past account statuses for future reference, the Debtor is considered to be in good standing with the Creditor company.
The Debtor agrees that they will not take any legal
action against the Creditor following the completion
of the Agreement. The one exception to this rule is if
the Creditor breaches the contract in some way.
For example, the Creditor may sell off the balance
of debt owed outside of the settlement to a third party, which is in violation of the terms of this Agreement.
Severability The terms of this agreement are accepted as a whole. If, for some reason, either
party cannot carry out one part of the Agreement, the rest of the Agreement should
be carried out as expected.
Similarly, if either party pursues legal action to void one part of the Agreement, and a court of law invalidates one section, it doesn’t void the entire Agreement.
Summary of debt owed There is a chance that the Debtor has multiple accounts with the Creditor. It is important to be clear about which debt(s) are part of this agreement. If you are consolidating multiple debts, be sure to summarize the details of each individual account.
Terms of payment The Terms of Payment for this Agreement apply to the debt(s) outlined in the above section titled “Summary of Debt Owed.” Payment terms apply to the debt(s) as a whole. The total of all debts owed by the Debtor to the Creditor is (Number) dollars ($Numerical.Amount) .
The Creditor agrees to settle this debt for the amount
of (Number) dollars ($Numerical.Amount) if the Debtor follows the outlined payment schedule below. The Debtor has the option to pay the debt in a single lump sum, which may result in a lower settlement amount than if the Debtor spreads the payment out over a period of months.
The Creditor offers the Debtor the opportunity to set up automatic payments via ACH transfer from your bank account or using your debit card. Credit cards are not accepted as a form of payment in settling this debt. Alternately, the Debtor can call monthly and may make
a payment manually over the phone with a representative from Sender.Company.
If an automatic payment is declined for any reason, or if the Debtor is late making a payment, it is the responsibility of the Debtor to contact the Creditor within three (3) business days to make the payment.
On the fourth (4th) business day, the Debtor may incur a late fee as outlined in the “Conditions” section of the Agreement. Missing a payment by more than three (3) business days may be grounds for voiding the Agreement in its entirety.
IN WITNESS WHEREOF,
each of the Parties has executed this Debt Settlement Agreement, both Parties by its duly authorized officer,
as of the day and year set forth below.
[Creditor.FirstName] [Creditor.LastName]
[Debtor.FirstName] [Debtor.LastName]
Electronic signatures with PandaDoc make it easy to work with clients remotely. Send documents electronically once you finish customizing a template. Once the Debtor signs, you’ll receive a notification to finalize the Agreement and send printable PDF copies to all parties involved. The completed agreement is stored with PandaDoc for easy access if you need to make amendments in the future or use the template again for other clients.
