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Sample Payment Plan Agreement

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A payment agreement is commonly used when a debtor is unable to pay the full sum required by the creditor in one go, so they come to a mutual agreement to pay a set amount over a period of time.

Please see the following sample payment agreement:

PAYMENT AGREEMENT

This Payment Agreement (the “Agreement”) is entered into on September 28, 2020  (the “Effective Date”), by and between Janice Doe, with an address of  Lot 658 Tryall Avenue, Montego Bay PO #1, St. James (the “CREDITOR”) and ABC Company, with an address of Lot 756 Fairview Mall, Montego Bay, St. James (the “DEBTOR”) collectively “the Parties.” WHEREAS, DEBTOR owes CREDITOR a certain debt; and WHEREAS, CREDITOR and DEBTOR desire to agree to memorialize this debt and an associated payment plan

NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions contained herein, the Parties agree as follows:

  1. Debt Amount. DEBTOR agrees he/she/it owes CREDITOR $40,000 JMD (the “DEBT”)
  2. Payment Plan. The parties agree to the following Payment Plan:

September 28, 2020 – Partial Payment of $20,000 JMD 

October 28, 2020 – Partial Payment of $20,000 JMD

The CREDITOR agrees to use the following method of payment to pay the balance in full: cheque

DEBTOR represents and warrants that he/she/it enters that this Payment Plan was developed in such a manner that he/she/it can make the required payments without causing further debt or detriment

  1. Release and Indemnification. By entering this Payment Plan, CREDITOR agrees to release DEBTOR from any previous claims, actions, and /or liabilities due to the Debt. The Parties agree thus Agreement does not release DEBTOR of any obligations to pay the Debt.
  2. Acceleration Clause. In the occurrence that the DEBTOR fails to render payment upon reaching thirty (30) days after the scheduled payment plan, the full amount of the deficiency shall become due and demandable. Any further failure shall give rise to the right to the CREDITOR to demand for damages.
  3. Agreement Modification. No modification of this Agreement shall be considered valid unless made in writing and agreed upon by both Parties.
  4. Assignment of Rights. The CREDITOR may transfer or assign this Agreement to a third party provided that written notice to the DEBTOR is given. In the event of such assignment, the assignee may amend the schedule of payment found in this Agreement.
  5. Severability. Should any provision found in this Agreement be held invalid, illegal, or unenforceable by any competent court, the same shall apply only to the provision and the rest of the remaining provisions hereto shall remain valid and enforceable.

I agree that the above schedule of payments us an acceptable resolution to help retire my debt with the chapter, and I remain current with this payment plan.

 

_____________________________________________ _______________

DEBTOR’S SIGNATURE and DATE

 

_____________________________________________ _______________

WITNESS SIGNATURE and DATE

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A legally binding payment plan must include the following information:

  1. Date
  2. Name and address of the creditor
  3. Name of address of the debtor
  4. Amount owed
  5. The good/service
  6. Interest Rate (if any)
  7. Method of Payment (Cheque, Cash, Wire Transfer/Direct Deposit, Salary Deduction, etc)
  8. Late Penalty (if any)
  9. Repayment Period
  10. Laws governing the subject

After both parties have signed the form, the document becomes legally valid.

 

********************************************************************

THE END

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