Settlement of a settlement with the debtor - what are the benefits?
By concluding a settlement with the debtor, both parties mutually agree to some concessions to each other. The most common solutions included in the settlement between the parties are either to spread the debt repayment into specific installments, or to release the debtor from paying the debt after the payment made by him, the value of which corresponds to the creditor.
Amicable settlement of the matter by way of a settlement, contrary to appearances, may turn out to be a favorable solution for the creditor. It is true that nowhere can we find the guaranteed privileges resulting from the settlement in detail, as all circumstances and conditions depend on an individual case. Below we will try to list and describe the most important advantages of this type of dispute resolution.
What do you get when you reach a settlement with the debtor?
First of all, concluding a settlement with the debtor saves the creditor's time to a significant extent, because the entire process is much faster than in the case of applying for a final and binding court decision. Undoubtedly, in such a case, the time in which the creditor receives the money is shortened, and in addition, the debtor, by agreeing to an amicable settlement of the dispute, reduces the amount of interest charged to him. The entire process of reaching a settlement usually ends with 3-4 meetings of the parties at a court hearing. In addition, it is very convenient that such meetings are held in a short period of time (usually several days), and the dates and times of meetings are set so that both parties can easily participate in them.
Settlement of a settlement with the debtor - related costs
Costs are another, no less important from the point of view of the creditor, advantage of concluding a settlement with the debtor. In such a case, only the mediator's fees should be covered. Such costs are determined jointly by the creditor and the debtor, who can negotiate in this respect. Undoubtedly, when comparing the costs of traditional court proceedings, in which you have to pay a court fee, an expert's fee, etc., the costs of concluding a settlement are much lower.
When is the limitation period interrupted?
A significant benefit for the creditor from concluding a settlement with the debtor is each time the limitation period for claims is interrupted. The limitation period is interrupted when mediation begins. If a settlement is successfully concluded and then approved by the court, it gains the force of a court settlement and may be an enforceable title authorizing enforcement.
The confidentiality of the pending settlement procedure is not without significance. It is obvious that the parties often do not want publicity or disclosure of information to third parties, if only because of the fear of losing reputation and respect, which is very important in economic transactions. The good name of the company and maintaining its position on the market, and sometimes even the very survival of the company or acquiring business partners, can be owed to an effective mediation. In the proceedings before the mediator, no information will see the light of day and thus will not get beyond the circle of people participating in mediation.