{"id":186172,"date":"2024-01-31T15:59:04","date_gmt":"2024-01-31T15:59:04","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=186172"},"modified":"2024-02-28T05:38:52","modified_gmt":"2024-02-28T05:38:52","slug":"what-is-debt-repayment-agreement","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/disputes-litigation\/what-is-debt-repayment-agreement\/","title":{"rendered":"What is a Debt Repayment Agreement?"},"content":{"rendered":"\n

Being owed money can be highly stressful for any business. However, there are many options to help you recover the money you are due. One of the most informal and practical options is to agree and sign a Debt Repayment Agreement with the party owing you money (the debtor). This article will outline a Debt Repayment Agreement and how it can benefit your business when you are due payment.  <\/p>\n\n\n\n

Options For Recovering Debt<\/h2>\n\n\n\n

Whilst being owed debt can be very unsettling, you have various options \u2013 both legal and practical. Legal options include writing a letter to the debtor asking them to pay and bringing court proceedings to claim the debt. You can also ask solicitors to write to the debtor<\/a> on your behalf, threatening court proceedings if they do not pay. However, legal options can be costly and sometimes disproportionate depending on the level of debt. <\/p>\n\n\n\n

It\u2019s always best to try more informal ways to pursue the debt, for example, by talking to the debtor and agreeing on a way forward. Taking the debtor to court should always be the very last resort. You should write to the debtor asking for payment and keep an audit trail of your informal efforts to recover the debt. <\/p>\n\n\n\n

One of the most effective ways to recover the debt is to agree on repayment terms with the debtor and formalise them in a written agreement.<\/p>\n\n\n\n

Debt Repayment Agreement Example<\/h2>\n\n\n\n

Suppose you have a great, long-standing business customer to whom you\u2019ve provided services for years. The customer has recently hit financial difficulties due to the current economic climate, meaning they have run into their own cashflow problems<\/a>. Unfortunately, they cannot afford to pay a hefty invoice, which has been outstanding for a while. <\/p>\n\n\n\n

You want to support your customers and maintain the strong relationship you have built. So, you have an open conversation about how they can pay the sums owed. <\/p>\n\n\n\n

The customer promises that they can pay you all the money over months in smaller amounts. So, rather than threatening your customer with legal proceedings, you take a pragmatic approach and agree on a plan for them to pay you the monies gradually. <\/p>\n\n\n

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How to Manage a Business Dispute<\/div>\n
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This fact sheet outlines how your business can manage a dispute.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n

Once you have agreed on the key terms, you should document them formally in a \u2018Debt Repayment Agreement\u2019. This agreement will set out details on the debt settlement by the customer and provide a clear strategy for recovering the debt. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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