Debt Suspension Agreements
Debt suspension agreements are the breakthrough banking services that are substitute to credit insurance. Debt suspension agreements are covered by the Comptroller of the Currency, Administrator of National Banks (OCC). The Debt suspension agreements are the long term or contractual agreement that adjusts loan terms within which the bank agrees to suspend all or part of the obligation of the customer’s to repay an extension of credit coming from the bank upon the occurrence of a specified event.
Debt suspension agreements include debt suspension agreements with interest continuing to accrue during the suspension period, and those that the accrual of interest has been suspended. Debt suspension agreements do not cover the arrangements the borrower unilaterally decides to stall a payment or bank unilaterally decides to let the deferral of payment called “skip-a-payment” agreement.
Simply put, the debt suspension agreement is the contractual agreement wherein the bank agrees to suspend everything or part of the obligation of the borrower to repay a loan because of job loss, hospitalization, military service, or other predetermined events.
