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Letter accepting a proposal to settle a debt
What’s a letter accepting a proposal to settle a debt and when should you use it?
You should use this letter if your business is owed a debt by another business, that business has proposed a way to settle the debt and you intend to accept the proposed arrangement.
This letter is not a legally binding agreement on you.
This is because an agreement to accept a proposal to pay a debt that is already due is not legally binding unless it is supported with some other new terms.
However, the party at risk here is the client or customer (the debtor).
If you both agree to these alternative payment terms, then you could provide the debtor with a letter stating that the payment terms are in full settlement of the disputed debt.
But our advise would be that you don’t provide such a letter unless you are comfortable doing so and the debtor has specifically requested it.
You can find our letter of agreement here
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