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Debt Forgiveness Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Debt Forgiveness Agreement

"I need a Debt Forgiveness Agreement for a corporate debt of HKD 2.5 million owed by my manufacturing company, where we've agreed to have 40% of the debt forgiven due to financial hardship, with the remaining amount to be paid in installments by March 2025."

Document background
The Debt Forgiveness Agreement is a crucial legal document used in Hong Kong when a creditor agrees to cancel or forgive all or part of a debt owed by a debtor. This document is particularly important in situations involving debt restructuring, financial hardship, or settlement negotiations. It must comply with Hong Kong contract law and financial regulations, providing clear documentation of the debt being forgiven, any conditions attached to the forgiveness, and the legal implications for both parties. The agreement typically includes details of the original debt, the amount being forgiven, any remaining obligations, and relevant terms and conditions. It serves as crucial evidence of the transaction and helps prevent future disputes by clearly documenting the parties' intentions and the extent of the debt forgiveness.
Suggested Sections

1. Parties: Identifies and defines the Creditor and Debtor with their full legal names and addresses

2. Background: Describes the original debt, its amount, date incurred, and any relevant history of the debt relationship

3. Definitions: Defines key terms used throughout the agreement including 'Debt', 'Forgiveness Date', and other relevant terms

4. Acknowledgment of Debt: Formal acknowledgment of the original debt amount and its validity

5. Debt Forgiveness: Clear statement of the amount being forgiven and the extent of the forgiveness

6. Effective Date: Specifies when the debt forgiveness takes effect

7. Release: Formal release of the debtor from the specified obligations

8. Representations and Warranties: Statements by both parties regarding their authority to enter into the agreement and other key facts

9. Governing Law and Jurisdiction: Specifies Hong Kong law as governing law and Hong Kong courts' jurisdiction

10. Entire Agreement: Confirms this document represents the entire agreement regarding the debt forgiveness

11. Execution: Signature blocks and execution requirements

Optional Sections

1. Partial Forgiveness Terms: Include when only a portion of the debt is being forgiven, specifying remaining obligations

2. Conditions Precedent: Include when the debt forgiveness is subject to certain conditions being met

3. Tax Implications: Include when there are specific tax consequences that need to be acknowledged

4. Confidentiality: Include when parties wish to keep the terms of the forgiveness confidential

5. Surviving Obligations: Include when certain obligations survive the debt forgiveness

6. Future Cooperation: Include when parties need to specify terms for future business relationships

7. Default and Remedies: Include when the forgiveness is conditional and may be revoked under certain circumstances

Suggested Schedules

1. Schedule 1 - Debt Details: Detailed breakdown of the original debt, including principal, interest, and any other charges

2. Schedule 2 - Payment History: Record of payments made against the debt (if applicable)

3. Schedule 3 - Related Security Documents: List of any security documents that need to be released or modified

4. Appendix A - Original Loan Agreement: Copy or reference to the original loan or debt agreement

5. Appendix B - Evidence of Authority: Corporate resolutions or other evidence of authority to enter into the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions




























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Relevant Industries

Financial Services

Banking

Real Estate

Construction

Manufacturing

Retail

Professional Services

Healthcare

Education

Hospitality

Technology

Trading and Distribution

Non-Profit Organizations

Relevant Teams

Legal

Finance

Treasury

Credit Control

Risk Management

Corporate Secretarial

Accounts Receivable

Collections

Corporate Recovery

Compliance

Relevant Roles

Chief Financial Officer

Financial Controller

Credit Manager

Accounts Receivable Manager

Legal Counsel

Corporate Secretary

Finance Director

Treasury Manager

Risk Manager

Collections Manager

Debt Recovery Officer

Business Development Manager

Corporate Restructuring Officer

Insolvency Practitioner

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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