Liquidity squeeze on the debtor's side

In most of the cases the reason for non-payment is lack of liquidity. Debtors will try to avoid payments as long as possible and request to pay installments. Normally this is a fair option as it allows to debtor to conduct further business.

For the conclusion of a Installment Agreement there are important legal aspects to be considered.

One-off lump sum payment settlement

Upon payment of an amicable settlement sum all possible claims arising from or in connection with the disputed claim can be settled. 

Contractual installment plan with several installment payments

In close coordination with the client, we will try to sign a instalment agreement or get a short-term deferral.

In most cases installment payments are granted following an agreed installment plan. Number of installments, the appropriate level of rates, as well as their due date is agreed in the installment plan. Of course the payment plan must consider all accrued costs and interest.

In the case of deferment of payment or agreement to pay in instalments all debts owed by the creditor shall be immediately due and payable (so-called "acceleration clause").

Terms of an installment agreement are legally complex according to German civil law and therefore are usually negotiated and resulting payments are controlled by a German lawyer.