Payment Agreements

Why They’re So Powerful

Did you know that a signed payment agreement acts as a new contract? And if this contract is broken, you have a solid legal case—one you’re almost certain to win.

If a debtor consistently misses payments on the agreed plan, you have the option to sue based on the breached payment agreement itself. In this case, you’re not pursuing action over the original product or service; you’re enforcing the terms of the new payment contract, which limits the debtor's grounds to dispute. By signing, they’ve committed to the new terms—such as paying a set amount weekly or monthly.

Important Steps for a Strong Agreement

• Include a stamped, self-addressed envelope with a copy of the payment agreement letter, along with the original.

• Add a confirmation line, for example:
  I, [Debtor’s Name], agree to the above payment arrangement.
  Signed By: _________ Date: _________

• Send via registered mail to ensure tracking.

Some debtors won’t sign and return this letter, which can signal they’re not serious about paying and may be stalling. However, those who do sign often intend to honor the agreement.