Debt Acknowledgement Agreement

A debt acknowledgment agreement is an agreement by someone that they indeed owe a debt. It can include a confirmation of the amount and a promise to pay the debt. A debt acknowledgment agreement can be separate from the loan documentation or promissory note.

Types

Many financial forms are considered debt acknowledgment agreements.

Debt acknowledgment agreements are a standard requirement for real estate mortgages. Signing a debt acknowledgment agreement is considered proof that someone knowingly and willingly entered a mortgage. A bill of exchange is a form of debt acknowledgment. The goods are exchanged for a promise to pay for the goods later. An IOU is a debt acknowledgment agreement; it confirms that a debt is owed to a specific person.

Collections

A signed debt acknowledgment agreement can be used as proof that a debt is owed. However, it cannot be collected by a court unless the debt acknowledgment agreement states the specific amount owed, the interest rate and when the debt must be paid.

Statute of Limitations

Different types of debt agreements have varying statute of limitations. The statute of limitations also depends on the jurisdiction where the agreement was signed. Signing a debt acknowledgment agreement for an expired debt restarts the statue of limitations.