Creditors, if you are willing to accept payment of a reduced sum in order to settle a borrower's debt to you, use this easy template to draw up an Agreement to Compromise Debt.

Under the Compromise Agreement, the creditor agrees to accept the lesser sum as payment in full, provided that the sum is paid within a specified time. If the debtor fails to make the payments on time, the creditor has the right to start legal proceedings against the debtor for the full amount of the debt.

This Agreement to Compromise Debt template is available as a downloadable and fully editable MS Word file.