Snaid & Morris

An acknowledgment of debt is a liquid document

Recently, we started discussing liquid documents and what constitutes a liquid document. Today, we’re going to have a quick chat about the first type of liquid document, which in today’s modern times is the most common since we don’t use checks anymore, and that would be an acknowledgment of debt. This is when a debtor who hasn’t paid you tells you they can’t pay, and you get them to sign an acknowledgment of debt. If drafted correctly, this acknowledgment of debt is seen as a liquid document and usually includes an acceleration clause. It’s an important document often used in insolvency circumstances, and we’ll discuss it further in the next few videos.