What Is The Acknowledgment of Part Payment of A Debt?
An Acknowledgment of Debt (“AOD”) is an agreement containing a clear and undeniable admission of liability by one party to another. The liability usually relates to the payment of a sum of money (“debt”) that must be made by one of the parties to the other party. For example, an AOD may be entered into where a party who caused a motor vehicle accident agrees to pay a sum of money to the other party to repair the damage caused to their motor vehicle. There are two parties to the agreement, which are referred to as the debtor and the creditor. The creditor is the party that is owed money in terms of the agreement and the debtor is the party who is liable to make payment in terms of the agreement. Both the creditor and debtor can consist of more than one person, for example, where the creditor/debtor is married in a community of property or more than one person was responsible for the debt (co-debtors).
Need For the Acknowledgment of Part Payment of A Debt?
An Acknowledgement of Debt, also known as an “IOU”, is a legal document that acknowledges that a debt exists and that the person signing the document is responsible for repaying the debt.
There are some advantages to using an Acknowledgement of Debt, such as:
-It can be used as evidence in court if the debtor fails to repay the debt.
-It can help to speed up the repayment process, as the debtor is likely to be more motivated to repay a debt when there is a formal document in place.
-It can be helpful in situations where oral agreements have been made, as it provides a written record of the agreement.
However, there are also some disadvantages to using an Acknowledgement of Debt, such as:
-If the debtor does not repay the debt, they may still be liable for interest and other charges.
-The debtor may be able to dispute the debt if they feel that they do not owe it, or if they believe that the amount owed is incorrect.
-The Acknowledgement of Debt may need to be registered with certain organizations for it to be legally enforceable.
FAQ For Acknowledgment of Part Payment of A Debt
Q1. Is part of payment an acknowledgment of debt?
Ans – There is an acknowledgment of liability of two debts by taking part. held thus: —“To give validity either to an acknowledgment or to a part payment not made by the debtor.
Q2. What is the purpose of the Acknowledgement of debt?
Ans – There are some advantages to using an Acknowledgement of Debt, such as: –It can be used as evidence in court if the debtor fails to repay the debt.
Q3. What is an acknowledgment of repayment of debt?
Ans – An Acknowledgement of Debt & Payment Schedule is a secondary agreement where a Debtor agrees to enter into a payment plan with you, to ultimately satisfy an outstanding debt.
Q4. What is the acknowledgment of debt called?
Ans – Debenture is a written instrument acknowledging a debt under the common seal of the company.
ACKNOWLEDGMENT OF PART PAYMENT OF A DEBT
Date:__________
I (Name)___________________,
S/o. Sh.________________________________
hereby acknowledge that I have paid Rs_________Rupees in words_____________________________________________________________________) in part payment of the debt of Rs._________ (Rupees in words __________________________________________________________________________________) borrowed by me from Sh.____________________________________
S/o Sh.____________________
R/o ___________________________
on a pronote executed by me in his favour on
(Date) _________.
(Signature)
