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A debt payment plan agreement is established between a debtor and a creditor when the debtor cannot pay the full amount owed. This plan allows the debtor to make incremental payments over time, typically due monthly, to fulfill the total debt. Creditors may offer flexible terms such as reduced amounts or extended periods for repayment, especially in cases of long-standing debts. Additionally, if a debtor is consolidating multiple outstanding balances to avoid high interest rates, they can negotiate with a third party to combine these debts into a single payment agreement. Key elements should be included in the contract to ensure clarity and compliance.