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This Letter allows a creditor to either cancel a debt or extend the time the debt will be repaid by the debtor due to the coronavirus/COVID-19 outbreak.
A creditor is a party that has lent money or is being owed a sum of money, while a debtor is a party that owes the creditor a specific amount of money. The creditor can be a financial institution, such as a bank, a moneylender, or any private individual or organization that the debtor owes money. On the other hand, a debtor is a person, who according to a Loan Agreement, Promissory Note, or any other agreement or arrangement made with the creditor, owes the creditor a certain amount of money and has agreed to repay the amount owed.
Other than its spread, the global pandemic had far-reaching consequences, which has significantly altered peoples' lives and businesses. One of its numerous effects is unemployment and lack of business. Due to this global crisis, many people have lost their means of livelihood and may be unable to fulfill their debt obligations. For this reason, a creditor may cancel the debt owed by their debtor, or give their debtor additional time to pay up their debts. This letter usually follows a Request Letter for Extension of Time to Pay Debt, and it outlines the amount owed, the date the debt was supposed to be due, and the new date or time frame within which payment should be made (if it is an extension of time).
How to use this document
After completing this document, it should be printed and signed by the creditor. If the creditor is a company or an organization, an officer of that organization, such as a director, may sign this letter on behalf of the organization.
A signed copy of this letter should be delivered either in letter form or via email to the debtor. The creditor should keep at least one copy for record purposes.
There is no specific law that mandates a creditor to waive a debt. However, the Money Lender Act and Money Lender Laws of the various states in Nigeria regulate loan transactions in Nigeria.
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Other names for the document: Waiver or Cancellation of Debt Due to COVID-19/Coronavirus, Letter Proposing Payment in Installments Because of the COVID-19 Pandemic, Letter to Cancel Debt Because of the COVID-19 Pandemic, Cancellation of Debt Due to COVID-19/Coronavirus, Letter to Waive Debt Because of the COVID-19 Pandemic