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A debt payment plan agreement is established between a debtor and a creditor when full repayment isn't feasible. This video explores the rationale behind such plans and the process of creating one. When creditors are owed money, they may accept incremental payments, allowing debtors to settle their obligations through installments, typically on a monthly basis, but adaptable to different frequencies. In certain scenarios, creditors might agree to reduced amounts or extended repayment terms, often relevant for longstanding debts. Additionally, debtors consolidating multiple high-interest debts can negotiate with a third party to simplify their repayments into a single agreement, and it's crucial to include these details in the contract.