What is Debt Compromise Deed?
Debt Compromise Deed is a legal document made for the final settlement of the original loan given by a lender, together with the mutually agreed interest due by the time of repayment of the loan by the borrower; this document may also contain any compromise on the interest or the principle payable by the related borrower.
This debt compromise deed is an inevitable or preferred legal document for execution of loans to diverse borrowers by a company, particularly a financial company or institution. Also known as the deed of debt compromise, this written legal document is fully elegant for hassle-free and smooth settlement/repayment of loans given by a lender.
Usage and Execution of Debt Compromise Deed
This section describes in brief the general usage and execution of debt compromise deed, for the purpose of giving loans by the lenders or repayment/settlement of the loans by the borrowers.
The debt compromise deeds (DCDs) are commonly used by both the lenders and the borrowers for the final settlement of the loans or debts concerned. Legally potent, this deed serves as a pivotal means for providing certainty to the lender, and safety to the borrower. Banks and other financial companies and institutions, and individuals, use this deed of debt compromise (DoDC) for their financial dealings with their respective borrowers.
This vital debt compromise agreement must be printed on a non-judicial stamp paper bearing a value of at least INR 10/-. Again, as both the lender and the borrower are required to keep a jointly signed original copy of the deed for their respective records, this legal agreement is to be made in two original copies.