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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 upfront. This plan enables the debtor to make incremental payments until the debt is fully paid off, typically on a monthly basis, though alternative payment frequencies may be arranged. Creditors might agree to let debtors repay a lesser amount or extend the repayment term, particularly with long-standing debts. If a debtor is consolidating high-interest debts, they might negotiate with a third party to settle outstanding balances into a single agreement. Essential terms and conditions should be outlined in the contract.