Release Of Debt Agreement for Germany

Release Of Debt Agreement Template for Germany

A Release of Debt Agreement under German law (Erlassvertrag) is a legally binding document governed by the German Civil Code (BGB), specifically §397, which formalizes the discharge of a debt obligation between a creditor and debtor. This agreement documents the creditor's voluntary renunciation of their right to claim a debt, either partially or in full, and outlines the terms and conditions under which the release is granted. The document must comply with German legal requirements regarding contract formation, consideration, and formal documentation, while addressing potential tax implications and ensuring clarity regarding the scope of the release.

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What is a Release Of Debt Agreement?

The Release of Debt Agreement is a crucial document used in German business and personal financial transactions when a creditor agrees to forgive or discharge a debt obligation. This agreement type is particularly relevant in scenarios involving debt restructuring, settlement negotiations, or financial hardship arrangements. The document, governed by German law, specifically addresses the requirements of §397 of the German Civil Code (BGB) regarding debt forgiveness (Erlass). It includes essential details such as the identification of parties, the amount of debt being released, any conditions attached to the release, and the effective date of the discharge. The agreement may be used in various contexts, from simple private debt forgiveness to complex corporate debt restructuring, and must consider relevant tax implications and insolvency laws where applicable.

What sections should be included in a Release Of Debt Agreement?

1. Parties: Identification of the creditor and debtor, including full legal names, addresses, and any registration numbers for companies

2. Background: Context of the original debt, including its origin, date, and current outstanding amount

3. Definitions: Key terms used throughout the agreement, including 'Debt', 'Release Date', and any other relevant terminology

4. Debt Acknowledgment: Clear statement of the existing debt amount and its components (principal, interest, fees)

5. Release Terms: Specific terms of the debt release, including whether it is full or partial, and any conditions precedent

6. Effective Date: When the release becomes effective and any conditions that must be met

7. Representations and Warranties: Statements by both parties confirming their authority and capacity to enter into the agreement

8. Further Assurance: Commitment to execute any additional documents necessary to give effect to the release

9. Governing Law: Confirmation that German law governs the agreement

10. Execution: Signature blocks and execution requirements

What sections are optional to include in a Release Of Debt Agreement?

1. Partial Payment Terms: Include when the release is conditional upon a partial payment of the debt

2. Tax Provisions: Include when there are specific tax implications that need to be addressed

3. Confidentiality: Include when parties wish to keep the terms of the release confidential

4. Related Party Release: Include when the release extends to related parties or guarantors

5. Insolvency Provisions: Include when the release is part of insolvency proceedings or debt restructuring

6. Future Claims Waiver: Include when parties want to explicitly waive future claims related to the debt

7. Dispute Resolution: Include when parties want to specify particular dispute resolution mechanisms

What schedules should be included in a Release Of Debt Agreement?

1. Schedule 1 - Debt Details: Detailed breakdown of the debt being released, including principal, interest, and any fees

2. Schedule 2 - Original Loan Documentation: Reference to or copies of the original debt documentation

3. Schedule 3 - Payment History: If relevant, history of payments made on the debt

4. Appendix A - Required Corporate Resolutions: If applicable, corporate resolutions authorizing the release

5. Appendix B - Related Security Documents: List of any security documents that need to be released in conjunction with the debt

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Release Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Insurance

Real Estate

Construction

Manufacturing

Retail

Professional Services

Healthcare

Education

Technology

Telecommunications

Energy

Private Lending

Asset Management

Debt Collection

Relevant Teams

Legal

Finance

Treasury

Credit Control

Debt Collection

Risk Management

Compliance

Corporate Secretariat

Accounting

Debt Restructuring

Special Situations

Transaction Management

Relevant Roles

Chief Financial Officer

Finance Director

Credit Manager

Debt Collection Manager

Legal Counsel

Corporate Lawyer

Insolvency Practitioner

Financial Controller

Account Manager

Treasury Manager

Risk Manager

Debt Restructuring Specialist

Collections Officer

Credit Analysis Officer

Finance Manager

Corporate Secretary

Compliance Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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