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A Debt Clearance Letter is a crucial document in Saudi Arabian business and financial transactions, used when a debt has been fully settled and the creditor needs to provide formal confirmation of the debt clearance. The document serves as legal evidence that all obligations have been met and the debtor is released from further claims. It must comply with Saudi Arabian civil law, commercial regulations, and Sharia principles, particularly regarding the documentation of financial transactions. This document is commonly used in various scenarios, including bank loans, commercial credit arrangements, and personal debt settlements. The letter typically includes specific details about the original debt, confirmation of payment receipt, and explicit release statements. Given the legal weight of such documents in Saudi Arabia, they must be carefully drafted to ensure enforceability and compliance with both civil and Islamic law requirements.

1. Letter Header: Date, reference number, and formal letterhead of the creditor

2. Addressee Details: Complete name and address of the debtor, including any relevant identification numbers

3. Debt Reference: Clear identification of the original debt agreement, including date, amount, and any reference numbers

4. Confirmation of Payment: Express confirmation that the full debt amount has been received and settled

5. Release Statement: Formal declaration releasing the debtor from all obligations related to the specified debt

6. No Claims Declaration: Statement confirming no further claims will be made against the debtor regarding this debt

7. Authorization: Details of the authorized signatory from the creditor organization

8. Signature Block: Space for signature, name, title, and official stamp