Payment Plan Agreement
This Payment Plan Agreement (the "Agreement") is made between [Creditor name (person or company)], of [Creditor address] ("Creditor"), and [Debtor name (person or company)], of [Debtor address] ("Debtor"). Debtor owes Creditor money arising from the following: [What the debt is for] (the "Original Obligation"). Creditor has agreed to accept payment of that debt in installments on the terms below rather than demanding it in full now. Creditor and Debtor are each a "Party" and together the "Parties".
1. Acknowledgment of Debt
Debtor acknowledges and agrees that, as of [Balance calculated as of], Debtor owes Creditor [Balance owed] (the "Balance") under the Original Obligation, that the Balance is justly due, and that Debtor has no defense, setoff or counterclaim to it. This acknowledgment is made for the purpose of confirming the debt and, to the extent applicable law so provides, renews the period within which Creditor may bring an action to collect it.
2. Payment Schedule
Debtor shall pay the Balance, together with any interest under Section 3, in [Number of installments] installments of [Installment amount] each, payable [Payment frequency], beginning on [First payment due] and continuing on the corresponding day of each period after that until [Final payment due], when any remaining Balance, interest, fees and costs shall be paid in full. If the installments as stated would not pay the Balance in full by the final payment date, the final installment shall be increased to the amount required.
Payments shall be made by [How payments are made], or as Creditor otherwise directs in writing. A payment is made when Creditor receives it in cleared funds. Each payment shall be applied first to late fees and costs then due, then to accrued interest, then to the Balance. If a payment date falls on a Saturday, Sunday or legal holiday, payment is due on the next business day.
3. Interest
Interest during this plan: [Interest during the plan]. If interest applies, it shall accrue as simple interest on the unpaid Balance from the balance date at [Annual interest rate (%) (or 0)] percent per year, calculated on the actual days elapsed over a 365-day year, and never more than the maximum rate permitted by law. If no interest applies and Debtor makes every payment on time, no interest accrues on the Balance during the plan; if Debtor defaults under Section 6, interest shall accrue on the unpaid Balance from the date of default at the rate provided in the Original Obligation or, if none, at the legal rate.
4. Late Payments
If any installment is not received within [Grace period before a late fee (days)] days after its due date, Debtor shall pay Creditor a late fee of [Late fee per missed installment] for that installment, to the extent permitted by law. The late fee compensates Creditor for the administrative cost of a late payment. Payment of a late fee does not cure a default or extend any due date.
5. Prepayment
Debtor may pay the entire remaining Balance, or any part of it, at any time without penalty. A partial prepayment reduces the Balance but does not postpone or reduce any scheduled installment unless Creditor agrees in writing.
6. Default and Acceleration
If Debtor fails to make any installment when due and does not cure the failure within ten (10) days after Creditor gives written notice, or if Debtor becomes insolvent, makes an assignment for the benefit of creditors or becomes the subject of a bankruptcy proceeding, Debtor is in default. On default, Creditor may declare the entire unpaid Balance, accrued interest, fees and costs immediately due and payable, and may pursue every remedy available under the Original Obligation, at law or in equity, as though this Agreement had not been made, with credit for the payments Debtor has actually made.
7. No Waiver; Forbearance
Creditor’s acceptance of any late or partial payment, or its failure or delay in exercising any right after a default, is not a waiver of that default or of any later default, and does not modify the schedule. Creditor’s agreement to forbear from collection while Debtor performs this Agreement is conditioned on Debtor’s performance and ends automatically on default. Any waiver must be in writing signed by Creditor and applies only to the instance stated.
8. No Novation; Reservation of Rights
This Agreement modifies only the time and manner of payment of the Original Obligation. It is not a novation, release, satisfaction or accord, and does not extinguish or replace the Original Obligation or any note, lease, contract, judgment, lien, security interest or guarantee relating to it, all of which remain in full force and continue to secure the Balance until it is paid in full. Nothing in this Agreement is an admission by Creditor that the Balance is less than the full amount owed under the Original Obligation, nor a waiver of any right Creditor has against any guarantor or other person liable.
9. Costs of Collection
If Debtor defaults, Debtor shall pay on demand all reasonable costs Creditor incurs in collecting the Balance or enforcing this Agreement, including collection agency fees, court costs and reasonable attorney fees, whether or not a lawsuit is filed, to the extent permitted by law.
10. General
This Agreement is governed by the laws of the State of [Governing law (state)], without regard to its conflict-of-laws rules. It, together with the Original Obligation, is the entire agreement between the Parties about payment of the Balance and supersedes all prior discussions of a payment arrangement. It may be amended only in a writing signed by both Parties. Creditor may assign this Agreement with the Original Obligation; Debtor may not assign it. If any provision is held invalid or unenforceable, it shall be enforced to the fullest extent permitted and the remainder remains in effect. Notices shall be in writing to the addresses above or the email addresses in the execution record. Time is of the essence.
11. Electronic Signatures; Counterparts
This Agreement may be signed electronically and in counterparts, each of which is an original and all of which together are one instrument. The electronic execution record, timestamps and document fingerprints kept by the signing platform are conclusive evidence of execution. Each person signing represents that they are authorized to bind the Party for whom they sign.
Signatures
Creditor · Debtor