Surrender of collateral agreement is the legal remedy taken under a securitized loan by the secured lender in case of default on part of the borrower and the debtor wishes and voluntarily agrees to surrender the collateral asset against which the loan was obtained.
An agreement to this effect is enacted and this agreement entails the cancellation of the loan against the collateral and the lender takes charge of the property or asset in question. This type of agreement is generally done by the voluntary submission of the debtor. The agreement is legally binding in nature and contains clauses with respect to the cancellation of loan, the total outstanding on part of the debtor along with the interest, the permission of the debtor to voluntarily allow the lender to take charge of the property, the right of both the parties, clauses such as indemnity and non-disclosure clauses etc.
[ Also Read: Collateral Assignment Agreement ]
Sample for Surrender of Collateral Agreement
A sample of the agreement can be downloaded from below.
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