Out of court debt settlement

The extrajudicial resolution of the debt allows to reach the regulation and the definition of the debts without the need to resort to the intervention of a judge. When debts are due and cannot be honored, creditors have the possibility and the right to apply to the judicial authority to claim their claims. However, before proceeding with the possible activation of an executive procedure and the consequent attachment, it is possible for the creditor and the debtor to sometimes find a solution that can be advantageous and inexpensive for both and that leads to an amicable resolution of the entire dispute.

There are basically two solutions.

Debt exposure

Debt exposure

The first is the possibility of returning from the debt exposure by means of a balance and excerpt, or a settlement proposal through which a percentage reduction of the entire debt is obtained. Debtor and creditor agree to pay a “balance” sum, that is, the debtor agrees to pay a lesser amount than the total residual debt. Transaction then defined as “excerpt” since the creditor, once the agreed payment has been obtained, will charge the residual amount of the debt not honored as “loss”, simultaneously declaring that it no longer has any claim against the debtor.

 

Preparation of debt repayment plans

The second way forward is the preparation of debt repayment plans that take into account the debtor’s current contribution capacity. We are talking about repayment plans in installments or in any case deferred, in which two are the main factors to be taken into consideration: the current sustainability of the installment and the time to repay the debt. The aim is in fact to make the debt burden to be paid to the creditor institution sustainable, facilitating the debtor’s payment of his debt and placing it again in the “economic conditions” suitable to satisfy creditors completely and pay off the debt position.

However, each situation is different and it is not possible to establish precise rules as in this type of agreement a lot also depends on the debtor’s accessibility. The purpose of the negotiations with creditors is however to find new agreements on the extinction and / or redefinition of the outstanding debts, an aim that must be certain, clear and aimed at finding a truly achievable solution.

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