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The Partial Payment Agreement Letter is a crucial document used in Canadian business operations when a debtor cannot pay their full outstanding balance immediately but is willing to settle the debt through structured payments. This document becomes necessary when both parties want to formalize a payment arrangement that differs from the original payment terms. It includes essential details such as the original debt amount, current balance, agreed payment schedule, and consequences of default, all while ensuring compliance with Canadian federal and provincial regulations. The letter serves multiple purposes: it acknowledges the debt, documents the new payment terms, provides legal protection for both parties, and can be used as evidence in case of future disputes. This type of agreement is particularly relevant in today's economic climate where businesses need flexible solutions for managing accounts receivable while maintaining positive customer relationships.

1. Parties: Full legal names and addresses of both the creditor and debtor

2. Original Debt Details: Statement of the original debt amount, date incurred, and any reference numbers

3. Current Outstanding Amount: Clear statement of the current outstanding balance including any interest or fees

4. Payment Terms: Detailed breakdown of the agreed payment schedule, including payment amounts, frequency, and method of payment

5. Duration: The start date and expected completion date of the payment arrangement

6. Default Provisions: Consequences of missing payments or breaching the agreement

7. Acknowledgment: Statement acknowledging the debt and commitment to the payment plan

8. Signatures: Space for both parties to sign and date the agreement