Legal Agreements

Letter Proposing to Installment Payment- what to keep in mind?

Letter Proposing to Installment Payment- what to keep in mind

Letter proposing payments means that if you cannot make the immediate payments of a whole debt, then this Letter proposing an instalment helps to detail the offer to pay off the debt by regularly fixed instalments. With that, this Letter of intent, an instalment, tries to stop the creditors from taking further action against you.

The Letter proposing instalments thoroughly outlines the proposal’s core details, including the due to be paid in instalments so that creditors are confident in your ability to repay the debt.

Let us understand with an example-When a dealer comes into an assignment with a large number of goods with a buyer, the buyer usually goes with the option of paying payments in parts. This is not always the case, but hypothetically and considering the number of consignments is significant and needs lots of work by the dealer to manufacture the product in bulk. So, in this case, the buyer and dealer may choose to come into a letter proposing payment in instalments.

How Does It Work?

Letter proposing instalment payments works in-.

  • When you or your organization are confident that you owe someone some amount of money
  • When the payments of the whole debt cannot immediately be made
  • When you don’t want the creditors to take further action against you
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Therefore, it covers the offer to pay off a debt in regular instalments.

What Is The Significance Of Letter Proposing Payment?

If you accept that the money you owe to an individual or company, you are currently out of financial resources to immediately pay off that money outstanding debt. You would like to offer to pay the due in instalments, and, in that case, a Letter proposing payment in instalments comes into the picture. The Letter will show excellent intention and willingness to pay off the debt.

This also helps in stopping the creditor from taking any action against you. The Letter also helps you with your cash flow, especially when your hands are in the business.

A Sample of Letter Proposing Payment in Installment

The below-shown Letter of intent, an instalment sample, is just an example. It doesn’t have the complete formal draft of the Letter. As the matter is of great concern, do not take any risk. We at Enterslice have a professional team to do such an essential task for you. For any help or query, contact us.

What Does It Include?

  1. The documents include-
  2. Basic details of dealer like name, address, phone number, account number
  3. Basic information of a buyer like a name, address, phone number, and account number
  4. Request date
  5. Details of the request, like when you are proposing to pay or get paid in parts of every month
  6. The actual purpose of the request, as it is advisable, is, to be honest about the situation.
  7. The Letter should also communicate whether the buyer suggests any other options.
  8. The Letter should also address the plan of action and the agenda.
Registered address,
The city with ZIP Code
Phone:
Fax no.:
Date
To,
The Manager
Company Name
Registered address
The town with the Zip code
Phone-
Fax- *
Dear Sir,
Due to prolonged depression in our trade, we have not been able to realize a more significant number of our outstanding accounts and as we know that we have failed to clear your exceptional account against us. We immensely apologize for it and wish you to understand that things turned out like this for reasons beyond our control. We are now trying our best to collect the due and dispose of our stock, even at an average profit, to secure ready cash.
Although we do not expect to collect sufficient funds that enable us to pay off the

Is The Letter Works As A Formal Legal Agreement?

It is like a letter proposing payment in instalments. Furthermore, it is an offer and doesn’t constitute a legal agreement until it is drafted by any professional and stamped. You can use it as a legal agreement if both parties want to. In addition, if the creditor accepts the offer through a formal letter accepting payments in instalments, the agreement takes the shape of a standard legal agreement.

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With mutual agreement, you can make the payment either weekly or monthly, depending on the financial situation.

Conclusion

Letter proposing payments means that if you cannot make the immediate payments of a whole debt, then this Letter proposing an instalment helps to detail the offer to pay off the debt by regularly fixed instalments. With that, this Letter proposing an instalment tries to stop the creditors from taking further action against you. We have guided you entirely on the Letter offering payment in instalments in case of any debt. I hope you like it. To know more about it contacts us at Enterslice.

FAQs

  1. Can I ask the creditor to freeze interest?

    Yes, you can request the creditor to freeze any amount of interest; however, the creditor does not oblige to accept the request. This request entirely depends on your relationship with the creditor and your bargaining strength.

  2. Can I consider my good credit history?

    Yes, you can choose to request the creditor to have a look at your good credit history. This will help the creditor have faith in you or your ability to meet the repayments on time and give you a stronger position for proposing payments in instalments.

  3. What if my Letter proposing payments gets rejected?

    So, in that case, you should consider negotiating with the creditor. It is not always possible that the creditor will be satisfied with all the proposal terms.

  4. What if I failed to pay the instalments on time?

    Calm down! If you think you are struggling to pay off the debtor and cannot make it to the instalment plan, you should consider taking help from various government plans for those struggling with debts and finance. Choose one! Contact us to know further about it.

  5. What are the related documents in the Letter proposing payments for the installation?

    The following documents are the related documents that are required –
    · Letter proposing payments in instalments
    · Second debt recovery letter
    · Letter before action
    · Promissory note
    · Debt recovery letter
    · Loan Agreement

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