Payment Plan Agreement

A short, binding agreement letting a customer pay an overdue balance in instalments. It confirms the amount owed, sets out the instalment schedule, explains what happens to interest and the customer’s account during the plan, and says what happens if a payment is missed.

It is designed for straightforward, recent debts. For larger or older debts, or where you want a stronger written acknowledgement and default provisions, use the Debt Acknowledgement and Repayment Agreement in this pack.

• When a customer asks for time to pay and you are willing to agree
• After a final demand, as an alternative to legal action
• To record an arrangement agreed by phone

• Fill in the parties, the balance and the invoices it covers in Schedule 1
• Complete the instalment schedule in Schedule 2 – check the instalments add up to the total
• Choose the interest option in clause 4 and the account option in clause 6
• Both parties sign; keep a signed copy on the customer file