Borrowing from any organization or an individual must be done with the right forms or paperwork to document the debt and the agreements of the debtor and the creditor. One of the documents to create and complete is known as a debt acknowledgment form.
Debt Acknowledgment Form Sample
What Is a Debt Acknowledgment Form?
A debt acknowledgment form is mainly a document that will state the borrower’s acknowledgment and affirmation to his debts, including his paid and unpaid debts. This form is often used by financial aid providers and institutions wherein the borrower, also known as the debtor or the party who owes the money, will formally acknowledge that he had borrowed an amount from the provider or the creditor. It is important that any signed debt acknowledgment form is created and filled out by the debtor, and will be sent to the creditor for documenting the acknowledgment as well as the intent of the debtor to provide payment for his debts.
How to Create a Comprehensive Debt Acknowledgment Form
A comprehensive debt acknowledgment form will have all the important subjects which should be tackled by the debtor and the creditor regarding the debt. To create this form, the steps below must be followed:
Step 1: Prepare a blank document sheet.
There can be various types of software applications that organizations can choose from in making their non-legal and legal forms including a debt acknowledgment form. Each software application will have different file extensions. For instance, if the application used is Microsoft Word, then the extension will be in “.DOC”, while if the software is made using OpenOffice Writer, then the extension will be “.ODT”. Moreover, after the document sheet is opened in the word processing software application, the margins must be changed depending on the preferences of the organization as well as the font-style or the typefaces to be used for the texts of the document’s content.
Step 2: Name the form and add a section for identifying the debtor.
The name or the title of the form can be placed in all caps or in all capital letters to emphasize it among the other contents of the form. Below the title should be a statement that will introduce who the debtor is such as “I, the undersigned ____ hereby acknowledge…” wherein the underline will be for stating the name of the debtor. Additionally, to whom the debtor owes his borrowed money should also be included in this portion of the form. And if the creditor is a company, then the full name of the company and the name of the representative who approved the credit should be stated in the form as well.
Step 3: Make a paragraph for disclosing the amount owed by the debtor.
The paragraph should include an area where the debtor will be able to state the purpose of why he borrowed the said amount from the creditor.
Step 4: Enlist the promises of the debtor or the inclusions of the debt.
This section will be for indicating what is included in the debt along with the amounts of each inclusion. Additionally, the interests which should be paid by the debtor as well should be disclosed along with the rules and regulations, and the responsibilities of the debtor which should be met. This, however, can be summarized into a few points which will focus on the important items to be acknowledged in the form.
Step 5: Incorporate a certification statement and a signature block.
The certification statement should be the last portion of the form where the date when the form is used will be indicated. Below the statement should be a signature block or area for the names and signatures of the parties involved: the debtor and the creditor.
After the contents of the form are made, the form must be saved for future use. This means that the fields or areas which will be for the information of the debtor and the creditor must be left blank so that filling out the form will be easier without having the need to remove entries or change each data for it to be updated.
Debt Acknowledgment Form in DOC
Examples of Debt Acknowledgment Forms
Some organizations associate other documents to debt acknowledgment forms resulting in combined documentation to be filled out by a debtor. On the other hand, there are also organizations who make several types of debt acknowledgment forms for each of their varying debts or credits. Nonetheless, below are some of the examples of debt acknowledgment forms that organizations can consider using:
Debt Acknowledgment and Repayment Plan Form – This is an example of a type of debt acknowledgment form which is combined with another document, specifically a repayment plan form. In the example, the form is intended to be used by students of an educational institution who have outstanding school debts ranging from the books that they are required to purchase up to the tuition fees and expenses. The form is composed of three sections along with an area for the instructions and important notice to be read and understood by the student or the debtor. The first section of the form is for the personal information of the student. This is where the student or the debtor will have to state his surname, his first name based on his school identification card, contact numbers, email, and physical addresses, the combined annual income of his family or household, and the identification numbers of his parents or legal guardian.
Debt Acknowledgment and Repayment Plan Form
The second section of the form is intended for the details of the acknowledgment of the student’s debts. The information of the student and his parents who will be the payer are some of the data to be stated in this section of the form. Moreover, the total amount to be paid by the payer should be specified as well. The location or the account where the payer must send the payment is also indicated in this section which is the account details of the school. On the other hand, the third section is for the declaration and consent, and the signature block. This is where the parties involved in the debt, the parent and the student, will be declaring that the information they have disclosed in the form was true and correct and that they understand that it will be used for income verification procedures.
Liability Admission and Debt Acknowledgment Form – A liability admission or an admission of liability form is another document which can be used along with a debt acknowledgment form. In a liability admission and debt acknowledgment form, the debtor will be providing his personal information including his identification number, reference number, and his scheme code in the first section. This will then be followed by the acknowledgment statement of the debtor which must state the amount that he owes from the creditor and his admission to his liabilities and responsibilities in relation to his debts. In the signature block of this form, not only the debtor will be the party who will have to affix his signature on the form but also a witness or an entity who is knowledgeable about the debt that the debtor owes.
Liability Admission and Debt Acknowledgment Form
After the information of the debtor and the debt, a section for the general information of the creditor will have to be filled out as well in order to complete the liability admission and debt acknowledgment form. In this section, the creditor’s banking details will be disclosed such as the name and branch of the bank, the account number of the creditor and its account type along with the signatures of the creditor and his witness. Upon submitting the completed acknowledgment form, the creditor must enclose documents that will prove his disclosed banking details. This includes his bank statement or a canceled cheque from the bank.
Undisclosed Debt Acknowledgment Form – This form is suitable to be used by lending agencies or financial aid providing companies. In the form, the debtor will be required to state all of his undisclosed debt obligation information to inform the agency of his credit state. The debtor must state his name, his residential address, and his loan number in the form. After the debtor’s information, the list of the creditors where the debtor borrowed his money from will have to be disclosed in the acknowledgment form along with the total obligation or the total amount that he owes from each creditor, and the amount of his monthly payment if the agreed payment method is by installment. And just like any other acknowledgment forms, the debtor must complete the acknowledgment statement with his name and his signature.
Undisclosed Debt Acknowledgment Form
In some courts or countries and States, completed and signed debt acknowledgment forms are considered as a type of credit agreement that will prove the debtor’s responsibilities to the debt and the identity of the creditor as well. However, it is more efficient to not rely on the acknowledgment and make a separate credit agreement form before the loan amount will be handed to the debtor or the borrower to ensure legal grounds of the debt transaction.
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