Often referred to as an ‘AOD’, it is a document of a legal and accounting nature where a debtor admits to an amount owing to a creditor and most often includes an undertaking to make payment in terms of a payment plan.

Parties can include provisions for interest and consequences for if the debtor defaults.

Why sign one:- not only does it give the creditor comfort that the debtor acknowledges the debt, but if the debtor defaults on payment then the creditor can enforce the AOD, it is a good idea to add in a clause whereby if the debtor misses a payment then all the other payments immediately become due.