Document background
The Loan Forbearance Agreement is a critical document used when a borrower requires temporary relief from their original loan obligations due to financial hardship or changed circumstances. Under Danish law, this agreement modifies the terms of an existing loan while maintaining the fundamental debtor-creditor relationship. It's commonly used during economic downturns, business restructuring, or when borrowers face temporary cash flow issues. The agreement typically includes detailed provisions about the forbearance period, modified payment terms, conditions for maintaining the forbearance, and consequences of default. It must comply with Danish financial regulations, including the Danish Credit Agreements Act and Financial Business Act, particularly regarding consumer protection and financial institution conduct. The document serves as a formal record of the temporary modification of loan terms while preserving the lender's rights under the original loan agreement.
