Deed of Settlement
A Deed of Settlement can be used in all types of undisputed debt recovery to help in the resolution of a matter and avoid unnecessary legal action. Both parties are tied into an agreement for a fraction of the price of legal action while securing the interests of both parties.
What is it?
A Deed of Settlement is a document that both parties agree to sign containing a Payment Plan that the debtor must adhere to. If the debtor does not make payments as per the agreement, there are consequences. Because of these consequences, our clients can be more lenient when it comes to the timeframe of repayment dates.
A Deed of Settlement can benefit both sides.
As a creditor, its benefits include:
- Security over the debt.
- A personal guarantee from the Director of a company.
- A charge over the debtor’s assets.
- Acceptance of the debt on the debtor’s part. This ensures the debt cannot be disputed at a later date.
- Interest on overdue payments.
As a debtor, its benefits include:
- More flexibility when it comes to repayment proposals as each payment is set to a specific date.
- Allowance to forecast dates they will pay and work towards those dates.
- Peace of mind. A deed can stop a creditor proceeding with legal action against a debtor and also put an end to any further legal action occurring if it has begun (if legal action has commenced, a clause can be put in place to finalise those proceedings as long as the arrangement is kept).
- No Credit Default being placed against them while there is an active Deed of Settlement.
- A confidentiality clause that stands if the debt is repaid.
If the Deed of Settlement is not adhered to, it ensures the debtor cannot decide they “dispute” the debt later on for the purposes of drawing out legal action. As listed above, there are many options available to the creditor should this occur.
Get in touch with us at 0800 445 870 for a free consultation.