A Deed of Debt Compromise is a formal written agreement between a lender and borrower for final settlement of the debt with a compromise on interest or principle payable. The debt compromise agreement details the amount of original borrowing and interest rate, the amount payable and the acceptance of the compromise on behalf of the lender and the final settlement amount.
This Debt Compromise Agreement can be used by a lender or borrower for the purpose of settling the final dues where some compromise on the interest or principle due has been intimated and mutually agreed upon. It has legal force over and against the debt obligation that was initially contracted.
The Debt Compromise agreement must be printed on a Non-Judicial Stamp Paper with a value of Rs.10/- or more. The Debt Compromise Agreement is made in two copies and the lender and borrower each hold one copy of the original signed agreement for their records.