A Deed of Acknowledgement of Debt is a document that we can prepare for you by which a debtor acknowledges their indebtedness to you and the amount of the debt.
A Deed of Acknowledgment can be prepared together with a payment plan for repayment of the debt and can include some form of security such as a caveat or director’s guarantee which will be in favour of the creditor.
In some cases, when a Deed of Acknowledgment is prepared, and executed by the creditor and debtor, it may be beneficial to the creditor to avoid incurring significant costs associated with litigation as they eliminate the necessity of proving the existence and the amount of the debt.
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The value of an Acknowledgment of Debt is that it is complete and final evidence that the debt is admitted as owing. This means that if you ever need to commence legal proceedings you can be certain that the debt cannot be denied, that judgment against the debtor can be quickly obtained, without any delays, and that you can then execute the judgment against the debtor through enforcement action.
