Document background
An Agreement To Pay Letter is commonly used in South African business and personal contexts when there is a need to formalize a debt repayment arrangement between parties. This document becomes necessary when a debt has accumulated and the parties wish to establish a structured repayment plan, typically arising from unpaid invoices, loans, or services rendered. The letter serves multiple purposes: it refreshes the prescription period under South African law, provides written acknowledgment of the debt, and establishes clear payment terms that both parties agree to follow. The Agreement To Pay Letter must comply with various South African legislation, including the National Credit Act and Consumer Protection Act, particularly regarding interest rates and repayment terms. It's a valuable tool for businesses and individuals seeking to manage debt recovery while maintaining professional relationships and legal compliance.
