Debt Settlement Agreement - Template, Sample Form Pro · US-law

DEBT SETTLEMENT AGREEMENT

State of ________

RECITALS

This Debt Settlement Agreement (the “Agreement”) is made and entered into as of ________ (the “Effective Date”), by and between the following parties (each a “Party” and collectively the “Parties”):

DEBTOR:
________
________
By its authorized representative: ________, ________

CREDITOR:
________
________
By its authorized representative: ________, ________

WHEREAS, the Debtor is indebted to the Creditor in connection with ________ (the “Debt”), evidenced by ________, dated ________;

WHEREAS, a bona fide dispute exists between the Parties concerning the amount, validity, and enforceability of the Debt; and

WHEREAS, the Parties desire to fully and finally compromise and settle the Debt, and to avoid the expense, delay, and uncertainty of litigation, upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants, promises, and releases contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

§ 1. Acknowledgment of Debt and Settlement Amount. The Parties acknowledge and agree that the current outstanding balance of the Debt is $________ (________) (the “Total Debt”). In full and final compromise and satisfaction of the Total Debt, the Creditor agrees to accept, and the Debtor agrees to pay, the reduced sum of $________ (________) (the “Settlement Amount”).

§ 2. Payment Terms. The Debtor shall pay the Settlement Amount in the following manner:

________

All payments shall be made by ________ and delivered to ________. Time is of the essence with respect to all payment obligations under this Agreement.

§ 3. Payment Deadline. The Creditor agrees to compromise the Debt as provided herein conditioned upon receipt of the Settlement Amount in full, in good and immediately available funds, on or before ________.

§ 4. Default. In the event the Debtor fails to pay any portion of the Settlement Amount when due, and such failure continues for ________ days after written notice from the Creditor, the Debtor shall be in default. Upon default, (a) this Agreement and the compromise contemplated herein shall be null and void, (b) the entire unpaid balance of the Total Debt, less any amounts actually paid hereunder, shall become immediately due and payable, and (c) the Creditor may pursue all rights and remedies available at law or in equity, including the recovery of reasonable attorneys’ fees and costs of collection to the extent permitted by applicable law.

§ 5. Conditional Nature of Settlement. All settlement terms, releases, and discharges described herein are expressly conditioned upon, and shall become effective only upon, the Creditor’s actual receipt and final clearance of the full Settlement Amount of $________ (________).

§ 6. Discharge of Debt. Upon the Creditor’s receipt and final clearance of the full Settlement Amount, the Debt shall be deemed fully, finally, and forever satisfied and discharged. Within ________ days thereafter, the Creditor shall, upon request, provide the Debtor with written confirmation of satisfaction of the Debt.

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§ 8. No Admission of Liability. This Agreement is a compromise of disputed claims. Nothing contained herein shall be construed as an admission of liability or wrongdoing by any Party, and any such liability or wrongdoing is expressly denied. Each Party further agrees not to disparage the other Party to any third party at any time.

§ 9. Accord and Satisfaction. The Parties agree that the terms of this Agreement are the result of arm’s-length negotiations and constitute a final accord and satisfaction concerning all disputes between them related to the Debt described herein.

§ 10. Covenant Not to Sue. The Parties agree not to commence, maintain, or prosecute any claim, action, or proceeding of any kind against the other Party concerning any matter released by this Agreement, except for any action necessary to enforce the terms of this Agreement. This Agreement may be pleaded as a complete bar to any such claim.

§ 11. Confidentiality. The Parties agree that the terms and conditions of this Agreement shall remain confidential, and no Party shall disclose any part of this Agreement to any third party, except (a) as required by subpoena, court order, or applicable law, (b) to a Party’s accountants, tax advisors, or legal counsel, or (c) as necessary to enforce this Agreement.

§ 12. Entire Agreement. This Agreement constitutes a single, integrated written contract expressing the entire agreement of the Parties with respect to its subject matter. All prior agreements, discussions, promises, and representations, whether written or oral, are merged into and superseded by this Agreement.

§ 13. Amendment. No modification, amendment, or waiver of any provision of this Agreement shall be binding upon any Party unless made in writing and signed by all Parties.

§ 14. Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect, and such invalid, illegal, or unenforceable provision shall be deemed modified to the minimum extent necessary to make it valid, legal, and enforceable.

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§ 16. Authority. Each Party represents and warrants that it has the full power and authority to enter into this Agreement and that the person signing on its behalf is duly authorized to do so.

§ 17. Voluntary Agreement. Each Party acknowledges that it has read this Agreement, understands its terms, has had the opportunity to consult with independent legal counsel of its own choosing, and enters into this Agreement knowingly and voluntarily.

§ 18. Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of ________, without regard to its conflict-of-laws principles. The Parties consent to the exclusive jurisdiction and venue of the state and federal courts located in ________ for any dispute arising under this Agreement.

§ 19. Notices. All notices under this Agreement shall be in writing and shall be deemed duly given when delivered personally, sent by nationally recognized overnight courier, or sent by certified mail, return receipt requested, to the addresses of the Parties set forth above or to such other address as a Party may designate in writing.

IN WITNESS WHEREOF, the Parties have executed this Debt Settlement Agreement as of the date(s) set forth below.

DEBTOR

_________________________________
________, ________, on behalf of ________, Debtor

Date: ________

CREDITOR

_________________________________
________, ________, on behalf of ________, Creditor

Date: ________