Document background
The Letter of Agreement for Payment of Debt is commonly used in Singapore when parties need to formalize arrangements for settling outstanding debts. This document is particularly useful when restructuring existing debt obligations or creating payment plans for overdue amounts. It provides legal protection for both creditor and debtor by clearly documenting the debt amount, payment terms, and obligations of each party. The agreement must comply with Singapore's Contract Act, Civil Law Act, and other relevant legislation, including limitations on interest rates and debt collection practices. It serves as evidence of the debt acknowledgment, effectively resetting the limitation period for debt recovery under Singapore law.
