An arrangement made with a creditor to pay back a loan with different terms than normally agreed upon. An example would be a person who falls behind on their rent coming to an agreement to make partial payments every 2 weeks until caught up, with the landlord waiving all late fees. Creditors usually accommodate payment plans because they would prefer to get paid at all than force the borrower into bankruptcy.

Related Lessons

• Click Here for our lesson on Getting Out of Debt Strategies
• Click Here for our lesson on Consolidating Debt
• Click Here for our lesson on Debt Management Services
• Click Here for our lesson on Bankruptcy