Evaluating Payment Plans | When to Accept Structured Settlement Offers

One of the most common questions creditors face during enforcement actions is whether to accept payment plans offered by debtors. A recent case handled by Shergroup provides valuable insights into the factors that should be considered when evaluating structured settlement proposals, particularly for substantial debts. 

The Initial Enforcement Interaction

In this case, our enforcement agent attended a residential property in a rural area to enforce a writ for a substantial debt of nearly £15,000. Upon arrival, the enforcement agent encountered a common scenario – the debtor was not present, but a family member was at home. 

While the female occupant refused to provide the debtor’s phone number (a frequent occurrence in enforcement situations), she did agree to accept our documentation and pass it along. This initial interaction, though limited, established official notification and created a communication channel, however indirect. 

From Indirect to Direct Communication

What followed demonstrates the effectiveness of professional enforcement approaches. Despite the initial indirect contact, the debtor himself reached out to our agent shortly afterward. This progression from third-party communication to direct engagement is a critical milestone in successful enforcement. 

During this direct conversation, the debtor proposed a structured payment plan consisting of: 

• An immediate initial payment
• A substantial payment of £4,000 within one week
• Two further payments of £6,000 each over the following two months

This comprehensive proposal would clear the entire debt within approximately 60 days (about 2 months), a short timeframe for a debt of this magnitude. 

Professional Assessment of Payment Proposals

Our experienced enforcement agent provided a preliminary assessment of the offer as potentially reasonable, which raises an important question for creditors: What factors should be considered when evaluating structured payment proposals? 

Key Evaluation Factors |

1.     Timeframe for full payment |

The proposed schedule would clear the debt within approximately two months – a relatively short period for a five-figure debt. 

2.     Front-loading of payments |

The proposal included a significant prompt payment (£4,000 within one week), demonstrating serious commitment rather than pushing the bulk of payments into the distant future. 

3.     Enforcement alternatives |

The agent noted no vehicles or readily seizable assets during the visit, suggesting limited immediate enforcement alternatives. 

4.     Debtor’s background |

The email address associated with the debtor contained the word “farming,” suggesting agricultural connections. Farm businesses often operate with seasonal cash flow patterns that may align with structured payments. 

5.     Property ownership |

Land Registry checks confirmed the property was owned by a farming business rather than the debtor personally, limiting charging order options. 

6.     Insolvency status |

Checks confirmed no insolvency proceedings, indicating the debtor was not attempting to avoid payment through formal insolvency routes. 

Previous Contact History

Interestingly, our records showed that our Debtor Services Team had previously contacted the debtor, who indicated willingness to make payment arrangements. This prior engagement, though it had not yet resulted in actual payments, suggested the debtor was not completely avoiding the debt – an important consideration when evaluating payment proposals. 

Key Takeaways

This case highlights several important principles in debt enforcement: 

• Indirect communication can lead to direct engagement | Even when family members act as gatekeepers, professional enforcement often prompts direct debtor to contact.
• Structured proposals deserve careful evaluation | While immediate full payment is ideal, well-structured payment plans can represent a practical path to full recovery.
• Context matters in assessment | The debtor’s business type, available assets, and previous engagement history are all factors in evaluating payment proposals.
• Client approval remains essential | While enforcement agents can provide professional assessments, final decisions on accepting payment plans properly rest with creditors.

Action Plan for Creditors

When facing decisions about accepting structured payment proposals, Shergroup recommends: 

1. Evaluate the timeframe realistically | Consider whether the proposed payment schedule is reasonable in relation to the debt amount.
2. Assess payment front-loading | Proposals that include substantial early payments demonstrate better commitment.
3. Consider enforcement alternatives | Understand what other enforcement options exist and their likelihood of success.
4. Review the debtor’s payment history | Previous payment attempts or communications can indicate willingness to honor commitments.
5. Examine the debtor’s business context | Seasonal or industry-specific cash flow patterns may support structured payments.
6. Request security where possible | Consider whether payments can be secured through formal agreements or asset commitments.
7. Establish clear consequences for default | Ensure the debtor understands that failure to maintain the payment schedule will result in immediate further enforcement.

Structured payment plans, when rigorously evaluated and monitored, can provide an effective route to debt recovery, particularly for substantial amounts. The key is careful assessment of the proposal’s terms against the practical alternatives and the specific context of each case. 

Contact Shergroup

Ready to discuss your enforcement options or evaluate a debtor’s payment proposal? Contact Shergroup today: 

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Address: 20 St. Andrews Street, Holborn, London EC4A 3AG   Our professional team is ready to provide expert guidance on your debt recovery London needs, offering solutions tailored to your specific circumstances. As a trusted debt recovery agency London, we specialise in efficient and compliant high court enforcement services to help you recover what you’re owed with speed and precision.