What is Debt Compromise Deed and how it is important for business?
A legal document that is made for the final resolution of the loan that is given by lender, with the interest that was mutually decided due by the time of the repayment by the borrower is known as a Debt Compromise Deed. This document may also contain any settlement on the interest or the proposition payable by the borrower.
Debt Compromise Deed is a is popular legal document for the application of loan to maney borrowers by a Company, especially the finance companies or institutions. This debt compromise deed is also known as deed of debt compromise, as this legal document is effective for nuisance free and easy repayment of loans by the lender.
Usage of Debt Compromise Deed in business
These Debt Compromise Deeds (DCD’s) are used not only by the lenders but also by the borrowers for final arrangement of the loans or debts. This arrangement provides safety to the borrowers and certainty to the lenders. This Deed of Debt Compromise (DoDC) is used by the banks and other financial institutions and companies, for dealing financially with the borrowers.
Execution of Debt Compromise Deed between parties
It is required that this Debt Compromise agreement must be executed and printed on a non-judicial stamp paper with a value of at least Rs 10/-. It is advisable that two original copies must be made of this legal agreement, as both the borrower and the lender are required to keep the jointly signed original copy of the deed and this deed must be a witness clause with signature and basic details of witness.