This Subordination Agreement is between a debtor, a creditor and a subordinator who is also a creditor. In this agreement the subordinator agrees that another creditor will have priority in regard to secured assets of the debtor. In other words, the subordinator’s claim is inferior to that of the other creditor. This agreement sets out the specifics of this arrangement including the names of the parties, the amount owed and any collateral for the debt. It is important that this business transaction be set out in writing. A well-written Subordination Agreement will be crucial in the event of misunderstandings or litigation between the parties.

This Subordination Agreement includes the following provisions:

• Parties: Sets out the name and address of the subordinating party, name and address of creditor receiving benefit of the subordination (“lender”) and the name and address of the debtor;
• Indebtedness: The amount owed by the debtor to the subordinator and any collateral for this debt;
• Indebtedness to Lender: Specifies the amount debtor owes to lender and the collateral securing this indebtedness;
• Consent of Subordinator: Subordinating party agrees that lender’s security shall have priority;
• Filings by Lender: Lender shall file any necessary financing documents which subordinator will agree to sign;
• Covenant of Debtor: The debtor acknowledges and consents to the priorities set out in this agreement regarding the indebtedness;
• Signatures: This agreement must be signed by the subordinator, the creditor and the debtor.

Protect your rights and your property by using our attorney-prepared forms.

This attorney-prepared packet contains:

1. General Instructions
2. Subordination Agreement

State Law Compliance: This form complies with the laws of all states