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Debt Purchase Agreement template
Debt Purchase Agreement sample


What is Debt Purchase Agreement?

Debt Purchase Agreement A Debt Purchase Agreement involves the sale of debt or loan portfolios, specifying the terms of the sale, purchase price, and transfer of ownership of the debt.



Sample template:



Debt Purchase Agreement


This Debt Purchase Agreement (the "Agreement") is made and entered into as of [Date], by and between [Seller's full legal name] ("Seller"), a [state of incorporation/formation and type of entity] with its principal place of business located at [Seller's address], and ABC Debt Acquisitions, LLC ("Purchaser"), a [state of incorporation/formation and type of entity] with its principal place of business located at [Purchaser's address], (collectively, the "Parties").

1. Purchase and Sale of Debt Portfolio

1.1. Description of Debt Portfolio


The debt portfolio (the "Debts") subject to this Agreement comprises a diversified range of consumer debts, including credit card debts, personal loans, and medical bills. The Debts have been previously issued by various financial institutions and creditors. The total face value of the Debts is approximately $5,000,000. The Debts vary in age and status.



1.2. Sale and Purchase


Subject to the terms and conditions of this Agreement, Seller agrees to sell, transfer, and assign to Purchaser, and Purchaser agrees to purchase, accept, and assume from Seller, the Debts, including all rights, title, and interest therein.



2. Purchase Price and Payment

2.1. Purchase Price


The purchase price for the Debts shall be [Purchase Price Percentage]% of the total face value of the Debts (the "Purchase Price"). The Purchase Price is inclusive of all applicable taxes and fees, if any.



2.2. Payment


Purchaser shall pay the Purchase Price to Seller by wire transfer of immediately available funds to an account designated by Seller on or before the closing date.



3. Closing

3.1. Closing Date


The closing of the sale and purchase of the Debts (the "Closing") shall take place on [Closing Date], or at such other time as the Parties may mutually agree in writing (the "Closing Date").



3.2. Transfer of Ownership and Delivery of Debt Portfolio


At the Closing, Seller shall execute and deliver to Purchaser a Bill of Sale and Assignment in the form attached hereto as Exhibit A, effecting the transfer of the Debts, and shall provide Purchaser with the relevant debt files, records, and documentation (collectively, the "Debt Files") in electronic format for each Debt, to the extent available.



4. Representations and Warranties

4.1. Seller's Representations and Warranties


Seller represents and warrants to Purchaser as follows:



  1. Seller has good and marketable title to the Debts, free and clear of all liens, encumbrances, and adverse claims;

  2. Seller has full power and authority to enter into, execute, and deliver this Agreement and to perform its obligations hereunder;

  3. This Agreement constitutes a legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms;

  4. The execution, delivery, and performance of this Agreement by Seller will not (a) conflict with, or result in a breach or violation of, any agreement or instrument to which Seller is a party or by which Seller or any of its properties is bound; or (b) violate any law, regulation, rule, judgment, or order applicable to Seller;

  5. All necessary consents, approvals, and authorizations for Seller to enter into and perform this Agreement have been obtained;

  6. No litigation, arbitration, investigation, or proceeding involving Seller, the Debts, or the transactions contemplated by this Agreement is pending or threatened;

  7. All information provided by Seller to Purchaser regarding the Debts, the Debt Files, and the related obligors is accurate and complete to the best of Seller's knowledge;

  8. The Debt Files are genuine and correspond to the Debts sold hereunder; and

  9. To the best of Seller's knowledge, the Debts and the collection practices relating thereto are in material compliance with all applicable federal, state, and local laws, rules, and regulations.



4.2. Purchaser's Representations and Warranties


Purchaser represents and warrants to Seller as follows:



  1. Purchaser has full power and authority to enter into, execute, and deliver this Agreement and to perform its obligations hereunder;

  2. This Agreement constitutes a legal, valid, and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms;

  3. The execution, delivery, and performance of this Agreement by Purchaser will not (a) conflict with, or result in a breach or violation of, any agreement or instrument to which Purchaser is a party or by which Purchaser or any of its properties is bound; or (b) violate any law, regulation, rule, judgment, or order applicable to Purchaser; and

  4. All necessary consents, approvals, and authorizations for Purchaser to enter into and perform this Agreement have been obtained.



5. Governing Law and Dispute Resolution

5.1. Governing Law


This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the United States and the State of [State], without regard to its conflicts of law principles.



5.2. Dispute Resolution


Any dispute, claim, or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation, or validity thereof, including the determination of the scope or applicability of this Agreement to arbitrate, shall be determined by arbitration in [City, State] before a single arbitrator. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Judgment on the award may be entered in any court having jurisdiction. The prevailing party in any arbitration or legal proceeding relating to this Agreement shall be entitled to recover its reasonable attorneys' fees and expenses from the non-prevailing party.



6. Miscellaneous

6.1. Entire Agreement


This Agreement, including any exhibits hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, oral or written, between the Parties concerning the subject matter hereof.



6.2. Amendment and Waiver


This Agreement may be amended, supplemented, or modified only by a written instrument signed by both Parties. The failure of either Party to enforce any provision of this Agreement shall not be construed as a waiver of that provision or any other provision.



6.3. Counterparts


This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument,



6.4. Notices


All notices, requests, and other communications hereunder shall be in writing and shall be given by personal delivery, registered or certified mail, return receipt requested, or overnight courier, to the respective Parties at their addresses set forth at the beginning of this Agreement or to such other addresses as the respective Parties may designate by written notice to the other Party in accordance with this Section. All such notices, requests, and other communications shall be deemed to have been given on the date of receipt, except that if delivery is refused or the notice, request, or other communication is returned because of an incorrect address, it shall be deemed to have been given on the date of such refusal or return.



IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its duly authorized representative as of the date first above written.

Seller: Purchaser:
[Full legal name] ABC Debt Acquisitions, LLC

By: ________________________ By: __________________________
Name: ______________________ Name: ________________________
Title: _______________________ Title: _________________________
Date: _______________________ Date: _________________________

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Sections of a Debt Purchase Agreement


In this Debt Purchase Agreement, you will see the following sections:

  1. Purchase and Sale of Debt Portfolio
  2. Purchase Price and Payment
  3. Closing
  4. Representations and Warranties
  5. Governing Law and Dispute Resolution
  6. Miscellaneous


Going indepth - Analysis of each section:

  1. Purchase and Sale of Debt Portfolio : This section describes the debt portfolio being sold, which includes various types of consumer debts like credit card debts, personal loans, and medical bills. The seller agrees to sell the debts to the purchaser, who will then own all rights, title, and interest in the debts.

  2. Purchase Price and Payment : This section outlines the purchase price for the debts, which is a percentage of the total face value of the debts. The purchaser must pay the seller the agreed-upon purchase price by wire transfer on or before the closing date.

  3. Closing : This section specifies the closing date for the sale and purchase of the debts. At the closing, the seller will transfer ownership of the debts to the purchaser and provide the purchaser with the relevant debt files and documentation.

  4. Representations and Warranties : In this section, both the seller and purchaser make certain promises and guarantees to each other. The seller promises, among other things, that they have the right to sell the debts and that the information provided about the debts is accurate. The purchaser promises, among other things, that they have the authority to enter into the agreement and that doing so will not conflict with any other agreements they are a part of.

  5. Governing Law and Dispute Resolution : This section states that the agreement will be governed by the laws of a specific state and that any disputes arising from the agreement will be resolved through arbitration. The prevailing party in any arbitration or legal proceeding will be entitled to recover its reasonable attorneys' fees and expenses from the non-prevailing party.

  6. Miscellaneous : This section covers various additional terms, such as the fact that the agreement constitutes the entire agreement between the parties and can only be amended in writing. It also outlines how notices should be given and states that the agreement can be executed in counterparts.

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