Contract templates · Loans & Payments
When a customer cannot pay an invoice in full, a written payment plan protects the debt and gives both sides certainty about instalments.
A payment plan agreement sets out an outstanding balance, the instalment schedule, payment method, what happens if a payment is missed, and the debtor's acknowledgment of the debt.
When you need one
- Customers who can't pay an invoice in full
- Settling an overdue debt
Key clauses in a Payment Plan Agreement
These are the clauses the template includes, and what each one does for you.
Outstanding balance
States the total amount owed.
Instalment schedule
Fixes the number, amount and dates of instalments.
Payment method
Sets how payments are made.
Missed payments
Says what happens if a payment is missed, including the full balance becoming due.
Acknowledgment of debt
Has the debtor acknowledge the debt is owed.
Common mistakes to avoid
- Agreeing a plan without an acknowledgment of debt.
- No acceleration clause for missed payments.
- Not recording whether interest continues to run.
How to use the template
Download the Word file
Buy the Payment Plan Agreement template on My Contract Lawyer and download the editable .docx straight after checkout.
Fill in the brackets
Add names, dates, fees, scope and governing law, and delete optional clauses that do not apply to your deal.
Check it against local law
Rules differ between US states, the UK and EU countries, especially for employment, consumer and property contracts. Have a lawyer review high-value or unusual deals.
Sign and keep a copy
Sign on paper or with any e-signature tool, and store the final version where both sides can find it.
Get the Payment Plan Agreement template
Lawyer-drafted and ready to edit in Word, Google Docs or Pages. One-time payment of $19, no subscription, instant download from My Contract Lawyer.
Frequently asked questions
Does a payment plan restart the limitation period?
In many jurisdictions a written acknowledgment of debt restarts the time limit for suing.
Can I charge interest on a payment plan?
Yes if agreed, subject to consumer credit rules for consumers.
Is this suitable for consumer debts?
It can be, but consumer credit rules may apply depending on the jurisdiction.
Related contract templates
Templates are a starting point, not legal advice, and using one does not create a lawyer-client relationship. Contract law differs between countries and states, so check the finished document against local law.