This form may be used to establish an agreement with a debtor to forbear enforcing a judgment as long as the debtor fulfills its payment obligations. The attorney must be careful to tailor the details of the agreement to the facts of the particular case.
Forbearance Agreement Letter
[Date]
[Name and address of debtor]
Re: Judgment entered under Cause No. [number] in the [designation court], [county] County, Texas, styled “[name of plaintiff] (“Judgment Creditor”) v. [name of defendant]” (“Judgment Debtor”) (the “Judgment”)
[Salutation]
This letter memorializes the terms of the agreement (the “Agreement”) between the Judgment Creditor and the Judgment Debtor with respect to the Debt and Judgment.
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Select one of the following. |
1.The parties agree that the Judgment Creditor will forbear enforcing the Judgment on condition that the Judgment Debtor pays $[amount of lump sum] in one lump sum on or before [date].
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Or |
1.The parties agree that the Judgment Creditor will forbear enforcing the Judgment on condition that the Judgment Debtor pays $[amount] as follows: $[amount of monthly payment] or more per month beginning on or before [date], and due on or before the [day of month] day of each successive month.
2.Payment should be made by CERTIFIED FUNDS payable to [names of payee and attorney] and forwarded to [payee’s or attorney’s address]. [Include the following if allowing the debtor to pay with personal or business checks: If payment is made by personal or business checks, the Judgment Debtor additionally agrees that, should a payment be returned for insufficient funds or dishonored for any reason, future payments must be made by cashier’s check or certified funds.]
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Select one of the following. |
3.Time is of the essence. If a payment is not received by its due date, the Judgment Debtor will be in default.
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Or |
3.Time is of the essence. If a payment is not received within seven (7) days of its due date, the Judgment Debtor will be in default.
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Or |
3.Time is of the essence. If a payment is not received within seven (7) days of its due date, the Judgment Debtor will be in breach.
4.If the Judgment Debtor is in breach, the Judgment Creditor will send the Judgment Debtor a notice of breach by [certified mail, returned receipt requested/e-mail] to [address]. If the Judgment Creditor receives all past-due payments from the Judgment Debtor within ten (10) days of the date listed on the notice of breach, the Judgment Debtor will have cured the breach. If the Judgment Creditor does not receive all past-due payments from the Judgment Debtor within ten (10) days of the date listed on the notice of breach, the Judgment Debtor will be in default. The Judgment Debtor agrees that the Judgment Debtor will have no more than two (2) opportunities to cure a breach per calendar year.
5.Should a due date fall on a weekend or recognized holiday, the due date shall be extended to the next business day.
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Continue with the following. |
6.Unless otherwise stated herein, nothing in this Agreement requires the Judgment Creditor to accept late payments. The acceptance of any late payments by the Judgment Creditor will not cure or excuse the Judgment Debtor’s default. The parties agree that, should the Judgment Creditor accept a late payment, the Judgment Debtor will remain in default regardless of the number of late payments accepted.
7.Nothing herein nulls, voids, compromises, satisfies, or settles the Judgment. The Judgment Debtor understands and agrees that should the Judgment Debtor fail to pay the amounts due in accordance with this Agreement, the Judgment Creditor may continue to enforce and collect the entire amount of the Judgment less credits for any payments made under this Agreement.
8.If the Judgment Debtor is not in default at the time the Judgment Debtor tenders final payment and after the Judgment Debtor’s final payment has cleared the bank, the Judgment Creditor will execute a release of judgment and forward it to the Judgment Debtor at the following address: [address]. The parties agree that it will be the sole responsibility of the Judgment Debtor to file the release of judgment in any county in which the Judgment was recorded.
9.No amendment or modification of this Agreement, and no waiver, discharge, or termination of any one or more of the provisions in this Agreement, shall be effective unless in writing and signed by all the parties.
If this correctly memorializes the terms of agreement between the Judgment Debtor and the Judgment Creditor, please indicate your approval of the terms stated in this letter by signing, dating, and returning a copy of this letter today.
This Agreement is neither valid nor enforceable until all parties have signed.
By signing below, I am agreeing to the terms stated in this letter.
Judgment Debtor:
By:
Signature
Printed Name
Title
Date: ________________
Judgment Creditor:
By:
Signature
Printed Name
Title
Date: ________________