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A debt payment plan agreement is established between a debtor and a creditor when the debtor cannot pay the full debt amount. Creditors may allow debtors to make incremental payments, enabling them to pay in installments until the debt is fully resolved. Payment plans are typically due monthly but can vary in frequency. Creditors may permit debtors to pay a reduced amount or extend the repayment period, particularly with long-standing debts. In cases of high interest rates, debtors may consolidate multiple outstanding balances with a third party into a single agreement, which is formalized in the contract. This video covers the purpose of these plans and how to create such agreements.