Need a Payment Plan Agreement? How to Lock In a Debtor’s Promise to Pay

The person who owes you money finally called back. They cannot pay the full amount right now, but they promise to pay in instalments — $500 a month until the debt is cleared.

Do not just say “okay” and hope for the best. A verbal promise to pay is hard to prove if they stop paying after the second instalment. You need a Payment Plan Agreement in writing.

Why a written agreement matters

• It locks in the exact amount owed, the payment schedule, and what happens if they miss a payment
• It is a legally binding contract — you can enforce it in court
• It typically includes a default clause: if they miss one payment, the full remaining balance becomes due immediately
• It protects both parties and prevents “I thought we agreed to something different” disputes

What a good payment plan includes

• Total amount owed
• Deposit amount (if any)
• Number of instalments, amount, and due dates
• Payment method (bank transfer, direct debit)
• Default clause — what happens if they miss a payment
• Interest on late payments (optional but recommended)
• Signatures from both parties

Get yours drafted

Claim Done drafts your Payment Plan Agreement for $49. Tell us the amount, the schedule, and the terms — we draft a legally binding agreement ready for both parties to sign. Done in about 5 minutes.