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Agreement to compromise debt

<Creditor’s name> and <Debtor’s name> hereby agree to compromise the indebtedness between them based on the following terms and conditions:

The CREDITOR and the DEBTOR agree that the present debt due is <$ amount balance>. The parties agree that the Creditor shall accept the sum of <$___ > as full payment on the debt. The payment will be made in cash and will result in complete discharge of the debt.

Both the parties have agreed on the date for payment as <date>. If the DEBTOR fails to pay the agreed amount on <date>, the original amount owed by the DEBTOR will stand to be immediately due. <Creditor> is hereby authorized to act as the agent of the creditor agency.

The parties, their successors and the assignees are bound to abide by this agreement and the resulting benefits.

 

<>Dated:
Creditor's Signature:

Name of creditor

Debtor's Signature:

Name of debtor

While we provide you with sample letters to help you deal with creditors and collection agencies, yet if you need further help, fill out the no-obligation free counseling form and feel free to talk to our financial coach.