An acknowledgement of debt (“AOD”) is when a debtor admits his debt responsibilities. The debtor admits that he be indebted a sum of money to the creditor and accepts to reimburse the amount on terms agreed upon amongst the parties involved.

Speak not of my debts unless you mean to pay them” (quote by George Herbett).




  • if a company has an account with a service provider, but the company is financially unbalanced and incapable to fulfil their payment, an AOD can be signed and accountability shifts from the company to an individual. This is like surety, although an AOD is not compulsory. “A billion here, a billion there, sooner or later it adds up to real money” (quote by Everett Dirksen).
  • If you don’t have confidence that the debtor will maintain payments or times past where payments have been in arrears. “Debts and lies are generally mixed together” (quote by Francois Rabelais)
  • If the debtor fails to follow to an agreed amount or date of payment. The AOD will undoubtedly state when, where, in what way and the amount owing, as well as the suitable interest rate. This is to guarantee that the debtor is fully mindful of all terms and conditions, circumventing any misunderstanding.

Good times are when people make debts to pay in bad times” (quote by Robert Quinlin).



An AOD would be of great value should the debtor defaulting and a summons is required. This means that the creditor need not essentially issue a summons, which means that the litigious process is settled much preferably than it would have been.



From a profitable viewpoint these contracts are essentially vital and as such the beneath are some imperative tips in order to guarantee that the all-out benefits obtainable to creditors are secured:

  • As a debtor must comprehend the particular contents thereof beforehand.
  • The debtor must confirm that he pays the arranged repayment on time and in full each and every month and failing to do so will result in judgment may be taken and listed against his credit record.
  • In AOD’s a provision is further confined concerning the compensation of legal costs and interest. “Interest on debts grow without rain” (quote by Yiddish Proverb). It is vital to warrant that the legal costs have been wholly clarified and the tariff on which it is based is fully divulged to him.
  • You, as a creditor, need to warrant that the AOD is fully all-inclusive in terms of the amount owing and that the banking particulars are precise and stated therein.



It is important that these documents are drafted by professionals in order to guarantee that they most suitably protect your rights.


“Today, there are three kinds of people:  the have’s, the have-not’s, and the have-not-paid-for-what-they-have’s” (quote by Earl Wilson).


(NOTE: this article is for information purposes only. Each case depends on merits of matter and should be consulted with an attorney OR clerk of the court)