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Debt Repayment Agreement Template for Hong Kong

A comprehensive legal document governed by Hong Kong law that formalizes the terms and conditions for repaying an outstanding debt. The agreement establishes a structured repayment schedule, includes interest calculations compliant with Hong Kong regulations, and outlines the consequences of default. It incorporates essential provisions for debt acknowledgment, payment terms, and enforcement mechanisms, while ensuring compliance with Hong Kong's Contract Ordinance and Money Lenders Ordinance. The document can be customized for both individual and corporate debtors, with options for including security arrangements and guarantees.

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What is a Debt Repayment Agreement?

The Debt Repayment Agreement is a crucial legal instrument used in Hong Kong when parties need to formalize arrangements for settling outstanding debts. It is particularly relevant when a debtor acknowledges a debt and agrees to a structured repayment plan with the creditor. The document is commonly used in scenarios involving business loans, personal debts, or commercial credits, and must comply with Hong Kong's legal framework, including the Contract Ordinance (Cap. 26) and Money Lenders Ordinance (Cap. 163). It provides security for both parties by clearly documenting the debt amount, repayment terms, interest rates, and consequences of default, while offering flexibility to accommodate various types of debt situations and security arrangements. The agreement can be used by both individual and corporate entities, and can include provisions for guarantors when additional security is required.

What sections should be included in a Debt Repayment Agreement?

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

2. Background: Explains the origin of the debt and circumstances leading to this repayment agreement

3. Definitions: Defines key terms used throughout the agreement

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

5. Repayment Terms: Details of the repayment schedule, including payment amounts, frequency, and method of payment

6. Interest: Specifies any interest rates applicable to the debt and how interest is calculated

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

8. Representations and Warranties: Basic statements about the parties' capacity and authority to enter into the agreement

9. Notices: How formal communications between parties should be made and delivered

10. Governing Law and Jurisdiction: Confirms Hong Kong law governs the agreement and Hong Kong courts have jurisdiction

11. Execution: Signature blocks and execution requirements

What sections are optional to include in a Debt Repayment Agreement?

1. Security: Include when the debt is secured by specific assets or guarantees

2. Guarantee Provisions: Include when a third party is guaranteeing the debt

3. Early Repayment: Include when early repayment options are available, including any penalties or benefits

4. Debt Restructuring Terms: Include when the agreement involves modification of previous debt terms

5. Force Majeure: Include when parties want to address circumstances that might prevent repayment

6. Confidentiality: Include when parties want to keep the terms of the agreement private

7. Assignment: Include when either party may need to transfer their rights or obligations

8. Dispute Resolution: Include when parties want to specify mediation or arbitration before court proceedings

What schedules should be included in a Debt Repayment Agreement?

1. Schedule 1 - Payment Schedule: Detailed breakdown of payment dates, amounts, and running balance

2. Schedule 2 - Original Debt Documentation: Copies or details of the original debt agreements or invoices

3. Schedule 3 - Security Details: If applicable, details of any security or collateral provided

4. Schedule 4 - Guarantor Information: If applicable, details of guarantors and their obligations

5. Appendix A - Payment Methods: Detailed information about accepted payment methods and banking details

6. Appendix B - Communication Protocols: Specific procedures for payment confirmations and general communications

Authors

Alex Denne

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

Jurisdiction

Hong Kong

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use

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