The Credit Card Settlement Agreement is utilized when a cardholder and financial institution in Nigeria agree to resolve outstanding credit card debt through a settlement arrangement, typically involving payment of a reduced amount to satisfy the full debt obligation. This document becomes necessary when a cardholder is unable to pay the full outstanding balance and the financial institution agrees to accept a lower amount as full settlement. The agreement must comply with Nigerian banking regulations, including the Central Bank of Nigeria Act 2007 and BOFIA 2020, while addressing consumer protection requirements. It typically includes detailed payment terms, release of liability provisions, and credit reporting arrangements. The document serves as crucial evidence of the settlement terms and protects both parties' interests in the debt resolution process.
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1. Parties: Identifies the credit card issuer/bank and the cardholder/debtor
2. Background: Outlines the existing credit card debt, account details, and circumstances leading to the settlement
3. Definitions: Defines key terms used throughout the agreement
4. Settlement Amount: Specifies the agreed settlement amount and percentage of original debt being settled
5. Payment Terms: Details the payment schedule, methods of payment, and deadline for settlement completion
6. Release of Liability: States that upon completion of settlement payments, the debtor is released from further liability
7. Default Provisions: Outlines consequences of failing to meet settlement terms
8. Representations and Warranties: Statements of fact and promises made by both parties
9. Confidentiality: Requirements for keeping settlement terms private
10. Governing Law: Specifies Nigerian law as governing law and jurisdiction
11. Entire Agreement: Confirms this agreement supersedes all prior discussions
12. Execution: Signature blocks and execution requirements
1. Third-Party Authorization: Required when a debt settlement company or legal representative is involved
2. Credit Bureau Reporting: Includes when specific agreements about credit report updates are negotiated
3. Tax Implications: Added when significant debt forgiveness requires tax reporting
4. Electronic Communication Consent: Included when parties agree to electronic notifications and updates
5. Acceleration Clause: Optional provision for early payment of the settlement amount
6. Force Majeure: Added when parties want to address unforeseen circumstances affecting payment ability
1. Schedule A - Original Debt Details: Detailed breakdown of the original credit card debt, including account statements
2. Schedule B - Payment Schedule: Detailed payment plan including dates, amounts, and payment methods
3. Schedule C - Account Information: Banking details and account information for settlement payments
4. Appendix 1 - Required Documents: List of supporting documents provided by both parties
5. Appendix 2 - Communication Protocol: Procedures for notifications and updates regarding settlement progress
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