What is a Letter Accepting Payments in Instalments ?
A Letter Accepting Payment in Instalments is a concise letter that accepts debt repayments from a debtor in instalments.
A Letter Accepting Payment in Instalments sets out the amount owed, as well as the date the debt has to be repaid, and is used to formalise the agreement for repayment if a business receives an offer by a debtor to pay off their debt in regular fixed amounts. This can prevent any potential legal disputes by setting out clear rules for the repayment of the debt.
A Letter Accepting Payments in Instalments can reserve the right to take any legal action to recover outstanding debt. If the debtor fails to repay the debt on time, this letter can serve as evidence of the agreement.
Key points included
- Amount of the debt;
- Instalment amount;
- Frequency of instalments; and
- Payment method.