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Agreement to Compromise Debt

On occasion you will encounter a customer who clearly cannot pay, despite his/her/their desire to do the right thing. In this case, it may be better to accept a partial payment that to try in futility to collect the entire amount. This document is a proposal for liquidation of the debt at less than face value. It can be used to compromise the debt for a business or an individual.

Click here for a sample. All information appearing in bold type and brackets are the form fields that would contain information specific to the parties involved and the debt being referenced.

Debtor (or Debtor Company Representative):
(Name of person signing the agreement for debtor company or just enter the debtor's name if debtor is individual)
Debtor Company:
(Name of debtor company, if applicable. Leave blank if debtor is an individual.)
City:
State/Province:
(Select a state for U.S. clients or a Canadian province)
Zip/Postal Code:
Country:
Creditor Company:
Representative:
(Name of person signing the agreement for creditor company)
City:
State/Province:
(Select a state for U.S. clients or a Canadian province)
Country:
Account Number:
(Account number of outstanding debt)
Date of Agreement://
(Select the month, day and year Compromise of Debt Agreement is made and entered into effect)
Balance:
(Current balance of debt)
Agreed Upon Balance:
(Indicate agreed upon reduced debt balance)
How Debt Will Be Paid:
(Indicate how the debt will be paid to the creditor company. Press <ENTER> to start a new paragraph.)
Governing State/Province:
(Which state/province governs the laws of this agreement?)

This is not a substitute for legal advice and it is suggested that an attorney be consulted.