Debt Settlement Agreement Letter

A Debt Settlement Agreement Letter states the terms and conditions of the debt settlement between the debtor and the creditor/collection agency.

(Creditor's/Collection Agency's name) and (debtor's name) hereby agree to settle the debt under the following terms and conditions:

The Creditor and Debtor agree that the current outstanding debt is $________(balance amount).

Both the parties agree that (Creditor's/Collection Agency's name) will accept a sum of $_________ as full repayment of the debt. The (Creditor/ Collection Agency) consents to compromise the debt under the condition that the company will recive the settled amount by [date].

The settled amount shall be considered as paid in full and (Creditor's/Collection Agency's name) will take no further collection action on receiving the settled amount.

If the (debtor's name) fails to pay in the settled amount by [date], the agreement shall be terminated immediately and the (Creditor's/Collection Agency's name) shall immediately demand the outstanding amount owed by the (debtor's name) in full.

(Name of Creditor's Representative) shall declare that he is authorized to act as a representative of the Creditor's company.

This agreement for debt settlement shall be binding upon and have effect to the benefit of the parties, their successors, and assigns.

Dated (Today's Date)

Signature:______________________

Authorized Representative of [Creditor OR Collection Agency Name]

Signature:______________________.

(Debtor's name)