Occasionally, settlement negotiations require some creativity with payment arrangements. My initial consultation with a business owner helps to identify the type of payment plan we will pursue and propose to their commercial creditor(s).
Many times, a client is able to offer a lump-sum payment for a fraction of a claim. Most commercial creditors are more willing to compromise on their claims if they do not have to carry payments over an extended period of time. Lump-sum payoffs typically provide the largest discounts and I have negotiated settlements for pennies on the dollar with many of these cases.
The most common settlements are structured on monthly payment plans. Most of my clients have depleted their liquid resources by the time they retain my services and they are unable to offer a lump-sum payment. Depending on our cash flow projections, settlement negotiations revolve around manageable monthly installments along with a discount on the principal claim.
When revenue projections are uncertain beyond a period of time, I have arranged for monthly payments with a balloon payment at the end and the agreement to reevaluate finances with the commercial creditor at that time. This usually results in adjusted monthly payments up or down going forward.
I have also negotiated cases where my client was able to offer a larger up-front payment followed by lower monthly payments. This usually helps to get a creditor's attention and eases their concerns about waiting for payment on the full settlement.
With over 22 years of settlement negotiation experience, I can typically steer a settlement in a direction that best benefits my client's financial situation and convince the creditor it is also in their best interest to accept.
Scott F. Soape
