Collecting debts with a repayment plan: the pros and cons

Picture the scene: You have received good news from your client; he is about to pay his unpaid invoices. But there is a catch. Your customer does not want to pay the whole invoice in one go, but, instead, suggests a repayment plan. Can you or can’t you live with the customer paying in instalments? Here, we list the pros and cons of a repayment plan, and help you decide.

What is a repayment plan?

A repayment plan is an agreement between a debtor and a creditor, whereby the debtor agrees to repay a debt in instalments. Usually the agreement is for fixed, monthly instalments.

Such a repayment plan, which spreads the payments, makes it more feasible for the debtor, your client, to pay off his debt. In parallel, it gives the creditor, you, more certainty that the unpaid invoices will be paid.

Advantages: the amicable route in the event of non-payment

  • Both you and your client benefit from a clear payment plan.
  • Every payment made by your client goes straight into your wallet.

  • A payment plan can be an interesting way to keep the commercial relationship with your client positive. However, we do advise that you clearly set the agreements, and arrangements in the case of postponement, down in writing and both sign the contract.
  • Spreading the cost burden gives your client more financial leeway.

voordelen nadelen afbetalingsplan


The disadvantages of a repayment plan

  • It may take some time before you have the last instalment in your account.
  • Your client may go bankrupt before the outstanding invoice has been paid in full.
  • There is a chance that the payments will not be made, despite the promises of your client.
  • Monitoring whether your client complies with the payment plan can be time consuming.

More certainty, less work: a repayment plan within the IOS procedure

Do you use the IOS procedure to collect unpaid invoices? If so, your client can also ask you to draw up a repayment plan.

Unpaid will only permit this if you agree and construct extra securities as follows:

  • The repayment plan is anchored within a solid legal framework.
  • This means, among other things, that other creditors can no longer claim the amounts that the customer has paid you.
  • We check for you whether the client is paying off his debt they should.
  • If the payments are still not made, we automatically restart the procedure and proceed with the legal recovery of the unpaid invoices.

Would you rather build on prevention than have to seek a cure? Apply Unpaid’s well-thought-out debtor management approach.