ClauseryPayment plan agreement
A written instalment plan for an overdue amount — invoices, rent, medical bills or personal debt. Set the total owed, regular payment amount, due dates, late fees and what happens if a payment is missed.
No sign-up. Editable Word (.docx) or print to PDF. Your answers stay in your browser. Updated .
A payment plan (also called an instalment agreement) turns a single overdue debt into a schedule of smaller, dated payments. Both sides sign so the amount owed, the timeline and the consequences of default are in writing, which keeps the original debt from being disputed later.
Keep the instalment amount realistic for the payer, and document every payment against the plan. If the original contract set a late-payment interest rate, that rate usually continues to apply unless the plan says otherwise.
What to include#
- Names and the original debt. Who owes whom and a short description of what the original debt was for (invoice number, lease month, loan date).
- Total balance as of today. The total amount owed when the plan is signed, including any interest or fees already added.
- Instalment amount and schedule. How much each payment is, how often (weekly/monthly), the first due date and the final payoff date.
- Payment method and late fee. How to pay (bank transfer, card, cheque), any processing fee, and the late fee or extra interest if a payment is late.
- Default and remedies. How many missed payments trigger default (commonly 15–30 days late), and what the payee can then do — demand full balance, charge late interest, or pursue collection.
How to fill it in#
Step 1: Confirm the balance
Both sides agree on the amount owed today. Include any existing late fees or interest already accrued.
Step 2: Pick a realistic instalment
Use the loan repayment calculator to see what monthly amount pays the balance off in a reasonable time. The payer must be able to afford it.
Step 3: Set the schedule and method
Choose monthly or weekly payments, a fixed day of the month, and the payment method. Include the first and last payment dates.
Step 4: Add late and default terms
Decide the grace period, the late fee, and how many missed payments make the full balance due immediately.
Step 5: Sign and track payments
Both sides sign. The payer keeps a copy; the payee records every payment (date, amount, reference) and gives a receipt on request.
Related templates and guides
Questions
Do I still owe the original debt?
Yes. The payment plan is a schedule for paying the acknowledged debt, not forgiveness. If you default under the plan, the full balance (less payments made) is usually due.
Can I charge interest on the plan?
Yes, if the original contract or applicable law allows it. Be careful not to exceed statutory interest or usury limits, which can make the clause unenforceable.
Does it have to be signed by both sides?
It is much stronger when both sign. A plan proposed and signed by only one side is just an offer — the other side has not agreed to it until they sign.
Is a payment plan a new contract?
It usually replaces the payment schedule of the original contract but leaves the rest of the original terms (work done, ownership, confidentiality) in place.
What if the payer misses one payment?
Most plans allow a short grace period (e.g. 10 days). After default is triggered the payee can usually demand the whole remaining balance and take collection action.
These are general templates, not legal or tax advice. Have anything unusual reviewed for your jurisdiction.