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Overview of the Letter accepting payments in instalments

If you've received an offer by a debtor to pay off their debt by a regular fixed amount use this letter accepting payment in instalments to create a formal legal agreement for the repayment of this debt. This instalment payment agreement will help avoid any potential conflict by setting out clear rules for the repayment of the debt with the debtor. This letter accepting payment in instalments will outline the fixed amount as well as the time in which it is to be repaid.

Use this letter accepting payment in instalments:

  • when you have received an offer to pay off a debt by a regular fixed amount

This letter accepting payments in instalments:

  • enables a debtor's offer to pay off a debt by a regular fixed amount, to be accepted
  • fixes the repayment of the debt over time
  • when signed by both the creditor and the debtor is a formal legal agreement

A letter accepting payment in instalments creates a formal legal agreement for the repayment of debt.

An instalment payment agreement will help to avoid any potential conflict by setting out clear rules for the repayment of the debt with the debtor.

If one of your clients cannot make immediate payment of a whole debt, they may offer to pay off the debt by regular fixed instalments to avoid facing legal action. They can do this using a letter proposing payment in instalments.

Entering a repayment agreement means that you can receive the money owed to you without having to take legal action. It can also be beneficial in maintaining a good business relationship with your client, especially if they are a loyal customer.

Once signed by both the creditor and the debtor, a letter accepting payment in instalments becomes a formal legal agreement.

Your client who is requesting payment in instalments may ask you to consider their credit history if they have generally been good at paying on time. It may also be beneficial to your business to consider their credit history in determining whether you can see them repaying the debt. You can respond to this request in an acceptance letter, taking it into account if you see fit.

Your client may ask you to freeze interest and any ancillary charges on an outstanding amount in their request to pay in instalments. This is something you can choose to do in your acceptance letter. If you refuse, the repayment agreement may be subject to further negotiations before it is accepted by both parties.

You can decide to enter into a loan agreement or use a promissory note. Read Loan agreements and promissory notes for more information.

Ask a lawyer for:

  • information about debt recovery
  • your legal rights under a contract
  • a debtor that does not agree to owing the debt
  • immediate recovery of the entire debt
  • a payment period that is too long or debts that are too small

This letter accepting payment in instalments is governed by the law of England and Wales.

Other names for Letter accepting payments in instalments

Payment plan agreement letter.