Acquittance (Debt Discharge) - Explained
What is an Acquittance?
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What is an Acquittance?
An acquittance is proof that an individual (a debtor) has been discharged from a debt obligation. An acquittance is a document or a receipt that reveals that a debtor has made full payment of their debt obligation. It is an evidence showing that the debtor has satisfied all the terms of a debt obligation.
How Does an Acquittance Work?
When a debtor has fulfilled all debt obligations, the lender issues acquittance to such a person as an evidence for full payment. A lender, a bank, a mortgage lender or an institutional lender can issue acquittance. Acquittance are letters or documents revealing that a lender is satisfied with payment made by debtor. Once an acquittance is issued, no further payment is expected from the debtor. Acquittance is also useful for future purposes, in mortgage for example, an individual can present the acquittance documents as proof that he had fulfilled all debt obligations associated with the loan. Acquitances are used in revolving debts and installment debts. An installment debt is different from a revolving debt, below are some explanations. An installment debt is a debt incurred by an individual and is to be repaid on a fixed schedule, at installment. This schedule call be monthly, quarterly or even weekly as agreed by the lender and a debtor. Also, people can make purchase to pay in installments, an individual that purchases an instrument with $1000 may have an agreement with the seller to spilt the payment and spread out across 3 or 6 months. A revolving debt on the other hand is associated with credits, in this form of issued debt, an individual acquires charges, pays them in full and then acquire new charges as he continues using the credit card.