CONPROMISE

Templates•2 documents available

Download 2 composition deed templates for debt compromise with creditors including installment payment agreements for debtors and guarantors under Indian law.

Composition Deed With CreditorsDOCX

Composition Deed With Creditors For Payment In Installment By The Debtor And GuarantorDOCX

Quick Overview

This specialized compromise legal document collection provides 2 essential composition deed templates designed for debt settlement and creditor compromise arrangements under Indian law. The collection includes composition deeds for direct creditor settlements and installment-based payment agreements involving debtors and guarantors. These professionally drafted templates facilitate out-of-court debt resolution, helping financially distressed individuals and businesses negotiate reduced settlements with creditors while avoiding bankruptcy proceedings. The documents cater to various debt restructuring scenarios, providing legal frameworks for creditor-debtor negotiations, installment payment arrangements, and guarantee provisions. Each template follows Indian contract law principles and debt settlement practices, making them valuable tools for debtors seeking financial relief, creditors pursuing debt recovery, and legal professionals handling debt restructuring cases.

All templates are provided for reference and should be reviewed by legal professionals before use.

Frequently Asked Questions

Common questions about CONPROMISE legal templates

What is a composition deed with creditors?

A composition deed is a legal agreement between a debtor and creditors where creditors agree to accept a reduced amount or modified payment terms in full settlement of the original debt, avoiding bankruptcy proceedings.

When should a debtor consider a composition deed?

A composition deed should be considered when facing financial difficulties, inability to pay full debts, threat of bankruptcy, or when creditors are willing to negotiate reduced settlement amounts to recover partial dues.

What is the role of a guarantor in composition deed with installment payments?

A guarantor provides additional security to creditors by guaranteeing the debtor's performance of installment payments as agreed in the composition deed, making the settlement more acceptable to creditors.

Are composition deeds legally binding in India?

Yes, composition deeds are legally binding contracts under Indian Contract Act once executed with proper consideration, mutual consent, and compliance with legal requirements by all parties involved.

What should be included in a composition deed?

A composition deed should include original debt amount, agreed settlement amount, payment schedule, creditor details, debtor obligations, guarantor provisions (if any), and consequences of default.

Can creditors reject a composition deed proposal?

Yes, creditors have the right to accept or reject composition deed proposals. The deed becomes effective only when all or majority of creditors (as per agreement terms) consent to the compromise settlement.

What happens if a debtor defaults on composition deed payments?

If a debtor defaults on composition deed payments, creditors may revive their original claims for the full debt amount minus payments already received, and pursue legal remedies including recovery proceedings.

How does installment payment work in composition deeds?

Installment payment allows debtors to pay the agreed settlement amount in periodic payments over time, making debt settlement more manageable while providing creditors with a structured recovery plan.

Can a composition deed be modified after execution?

A composition deed can be modified only with mutual consent of all parties involved through a supplementary agreement or deed of modification, ensuring all changes are legally documented.

What are the tax implications of composition deeds?

Debt forgiveness through composition deeds may have tax implications including deemed income for the debtor. Consult a tax advisor to understand specific tax obligations under Income Tax Act provisions.