Free Payment Agreement Template

PAYMENT AGREEMENT This Payment Agreement (the "Agreement") is entered into as of [Effective Date] (the "Effective Date"), BETWEEN: [Creditor Name], with a mailing address at [Creditor Address] (the "Creditor"); AND [Debtor Name], with a mailing address at [Debtor Address] (the "Debtor"). The Creditor and the Debtor may be referred to individually as a "Party" and collectively as the "Parties." 1. ACKNOWLEDGMENT OF DEBT The Debtor acknowledges that the Debtor owes the Creditor the sum of [Total Amount Owed] (the "Total Amount") arising from [Original Debt or Obligation Description] (the "Obligation"). The Parties agree to settle the Obligation according to the installment payment schedule in this Agreement rather than demanding immediate payment in full, subject to the terms below. 2. PAYMENT SCHEDULE (a) Installments. The Debtor will pay the Total Amount in installments of [Installment Amount] on a [Payment Frequency — e.g., monthly] basis. (b) Due Dates. The first installment is due on [First Payment Due Date]. Subsequent installments are due on the same day of each [Payment Frequency] period until the Total Amount is paid in full. (c) Final Payment. The final installment is due on or before [Final Payment Due Date]. The last payment may be adjusted to pay any remaining balance. (d) Application. Payments will be applied first to fees and interest (if any), then to principal, unless otherwise required by law. 3. INTEREST AND CHARGES (a) Interest. [Interest Rate or Finance Charge — e.g., "No interest accrues" or "Outstanding balances accrue interest at X% per annum"]. (b) Late Fee. If an installment is not received within [Grace Period — e.g., five (5)] days after the due date, the Debtor will pay a late fee of [Late Payment Fee] for that installment, plus any interest permitted by law. (c) Costs of Collection. If the Creditor must enforce this Agreement, the Debtor will reimburse reasonable collection costs, including court costs and attorney fees, where allowed by [Governing Law / Jurisdiction]. 4. METHOD OF PAYMENT Installments must be paid by [Payment Method — e.g., ACH, check, wire, online portal] to [Payment Instructions]. The Debtor is responsible for ensuring payments are received by the due date. A payment is not considered made until cleared funds are received by the Creditor. 5. PREPAYMENT The Debtor may prepay any portion of the outstanding balance without penalty unless otherwise stated in [Prepayment Terms — e.g., "N/A"]. Prepayments will be applied to the principal balance in inverse order of maturity unless the Debtor directs otherwise in writing. 6. REPRESENTATIONS Each Party represents that it has authority to enter this Agreement. The Debtor represents that the Obligation description is accurate to the Debtor's knowledge and that no bankruptcy or insolvency proceeding is pending, unless disclosed in writing to the Creditor before signing. 7. DEFAULT Events of default include failure to pay any installment when due (after any applicable grace period), material misrepresentation, or breach of this Agreement. Upon default, the Creditor may declare the entire remaining balance immediately due and payable after [Default Cure Period] days' written notice and opportunity to cure, except where cure is not permitted by law. 8. NO WAIVER OF RIGHTS This Agreement does not waive any rights the Creditor had under the original Obligation except as expressly stated. The Creditor's acceptance of late or partial payments does not waive the right to enforce this Agreement or declare a default. 9. AMENDMENTS Changes to the payment schedule or Total Amount require a written amendment signed by both Parties. Verbal modifications are not binding. 10. GOVERNING LAW This Agreement is governed by the laws of [Governing Law / Jurisdiction], without regard to conflict-of-law principles. Disputes will be resolved in the courts of [Governing Law / Jurisdiction], or by mediation if the Parties agree in writing. 11. NOTICES Notices under this Agreement must be in writing and sent to the addresses above or updated addresses provided in writing. Email notice is effective only if the receiving Party confirms receipt or if permitted in [Notice Method — e.g., "Exhibit A"]. 12. GENERAL (a) Entire Agreement. This Agreement constitutes the entire agreement regarding repayment of the Obligation described herein. (b) Severability. If any provision is held unenforceable, the remaining provisions remain in effect. (c) Assignment. The Debtor may not assign this Agreement without the Creditor's prior written consent. The Creditor may assign its rights with notice to the Debtor where permitted by law. (d) Counterparts and Electronic Signatures. This Agreement may be executed in counterparts, including electronic signatures, each of which will be deemed an original. IN WITNESS WHEREOF, the Parties have executed this Payment Agreement as of the Effective Date. CREDITOR Name: [Creditor Name] Signature: _______________________________ Name of Signatory: _______________________ Title: ___________________________________ Date: ____________________________________ DEBTOR Name: [Debtor Name] Signature: _______________________________ Name of Signatory: _______________________ Date: ____________________________________