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Keep and Pay


The term “Keep and Pay” refers to a financial arrangement in which a person is allowed to retain an asset, such as a house or car, and continue making payments on the loan used to purchase it. This arrangement is common in bankruptcy proceedings when an individual wishes to keep certain assets while undergoing debt restructuring or repayment plans. The debtor must demonstrate that they can afford the ongoing payments to maintain this arrangement for the duration of their repayment period.


The phonetic representation of the keywords “Keep” and “Pay” using the International Phonetic Alphabet (IPA) are:- Keep: /kiːp/- Pay: /peɪ/

Key Takeaways

  1. Keep and Pay are solutions that help merchants and consumers manage transactions and payments. With Keep, merchants can securely store and organize customer information, enabling seamless transactions. With Pay, customers can make safe, quick, and convenient payments online or in-store.
  2. Security is a key feature in both Keep and Pay. Keep uses encryption and tokenization to ensure that customer information is protected, while Pay uses secure methods of payment processing to prevent unauthorized access and fraudulent activities.
  3. Keep and Pay also offer integration options, making it easy for businesses to incorporate these solutions into their websites, mobile applications, and point of sale systems. This allows merchants to improve customer experiences and streamline business operations while offering customers a secure, efficient, and hassle-free way to make payments.


The business/finance term “Keep and Pay” is important because it refers to a business owner or borrower’s obligation to maintain particular assets and continue making payments on certain liabilities. This concept often arises in situations like debt restructuring, mergers and acquisitions, or bankruptcy proceedings, where a clear understanding of financial responsibilities is vital for both parties involved. By identifying and designating which assets are to be retained and which liabilities are to be paid, the “Keep and Pay” principle provides a framework that ensures continuity in business operations and a diligent approach to fulfilling financial obligations. In essence, this term safeguards the interests of all stakeholders, promotes financial accountability, and helps in maintaining stability during transitional or challenging times.


Keep and Pay is a financial concept used in the context of mergers and acquisitions, as well as corporate reorganizations. Its purpose is to identify the assets and liabilities that the acquiring company chooses to retain and take responsibility for after the completion of the transaction. This assessment allows companies to strategically prioritize the aspects of the business that are valued most. By adopting a judicious approach, companies can focus on expanding or streamlining their operations, without unnecessarily overburdening themselves with unwanted obligations or extraneous assets. In doing so, they can optimize resources, manage risks, and maintain a healthier balance sheet in the long run. The process of deciding which assets and liabilities to keep and pay is crucial for the success and growth of the company. This can include real estate properties, divisions, intellectual property rights, and outstanding debts or obligations. During the negotiation phase of an acquisition or reorganization, both parties involved will review financial statements, assess the value and risk associated with each asset or liability, and negotiate the terms and conditions under which they will be retained or transferred. This can involve extensive due diligence to ensure all values and risks are adequately understood and considered in the final decision. By incorporating the keep and pay concept into their strategic planning, businesses can make informed choices that drive long-term growth and sustainability.


The term “Keep and Pay” often refers to an arrangement where the borrower or debtor agrees to continue retaining an asset and pay back their debt obligations. Here are three real-world examples: 1. Mortgage Loan: In a mortgage loan, an individual obtains the finances to purchase a home or property by agreeing to keep and pay their debt to the lender, usually a bank or financial institution. The borrower keeps the property as collateral during the repayment period, and as long as they continue the agreed payments without failure, they can retain the property in the long run. If the borrower defaults, the lender has the right to repossess the property to recover their loss. 2. Auto Loan: A car buyer may obtain an auto loan to finance the purchase of a vehicle. This agreement means that the borrower will keep and pay the car back by making installments according to the loan terms. Once the debt is fully paid, the vehicle ownership is entirely the borrower’s. However, if the borrower fails to keep and pay, the lender can repossess the car and sell it to recover their losses. 3. Consumer Loans (e.g., appliance financing): When a consumer buys an appliance, like a refrigerator or a washing machine, they may opt for financing if they cannot afford the full upfront payment. They agree to keep and pay for the appliance through installments, typically over several months to years. As long as the consumer continues to make the agreed-upon payments, they can keep the appliance. In case of failure to comply, the financing company may recover the appliance.

Frequently Asked Questions(FAQ)

What does the term “Keep and Pay” mean in finance and business?
Keep and Pay is a financial term that refers to a debtor’s ability to retain possession of an asset, such as a car or a home, by continuing to make regular payments to the creditor, as per the agreed terms of the loan or lease agreement.
When is the “Keep and Pay” option applied?
The “Keep and Pay” option is often applied during bankruptcies or financial hardships, where the debtor negotiates with the creditor to maintain possession of an asset, as long as they continue making payments as per the original agreement.
Can Keep and Pay apply to all types of loans?
Keep and Pay is most commonly applied to secured loans, such as auto loans or mortgages, where there is collateral (e.g., car or property) that can be repossessed in case of default. It may not be applicable to unsecured loans, such as credit card debt or personal loans.
How does Keep and Pay affect a debtor’s credit score?
Keep and Pay can have a positive impact on the debtor’s credit score if they continue to make timely payments, as it demonstrates their commitment to fulfilling their financial obligations. However, if the debtor defaults on payments, the repossession of the asset can negatively impact their credit score.
What is the difference between Keep and Pay and a loan modification?
Keep and Pay involves continuing to make regular payments as per the original loan agreement, while a loan modification involves altering the terms of the loan, such as reducing the interest rate, extending the repayment period, or forgiving a portion of the principal.
Can a debtor use Keep and Pay for multiple assets?
Yes, a debtor can negotiate to keep and pay for multiple assets, such as a car and a home, as long as they continue to make regular payments to their respective creditors. However, it is essential to consider the debtor’s ability to afford all the payments in the long run.
How can a debtor negotiate a Keep and Pay agreement?
A debtor can negotiate a Keep and Pay agreement with their creditor by providing evidence of their ability to continue making payments and by conveying the importance of retaining the asset. It can be helpful to seek advice from a financial advisor or bankruptcy attorney during this process.
Can a creditor deny a Keep and Pay request?
Yes, a creditor can deny a Keep and Pay request if they believe that the debtor does not have the financial capacity to continue making payments, or if they think it is more financially beneficial to repossess the asset and sell it to recover their losses.

Related Finance Terms

  • Debt Restructuring
  • Bankruptcy Reorganization
  • Repayment Plan
  • Creditor Negotiation
  • Collateral Retention

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