Debt Repayment Through a Settlement. Why Is It Worth Considering?

A settlement is an agreement between the parties that helps clearly define the rules for repaying an existing debt. The parties may agree on terms that reduce uncertainty related to the obligation and set out the conditions clearly.

In connection with debt repayment, a settlement with a creditor may specify, among other things:

• the current amount of the obligation, including, for example, additional interest for late payment,
• the method of repaying the debt,
• the amount and number of instalments,
• the due dates of subsequent payments,
• the account number for payments or other available payment methods,
• the rules that apply in the event of delays in debt repayment,
• how to make contact if your financial situation changes.

A settlement with a creditor does not automatically mean that part of the debt will be cancelled or that the creditor waives any rights to which it is entitled. The exact consequences always follow from the wording of the particular document. Therefore, before accepting the terms, read the entire agreement, not only the information about the instalment amount.

A well-prepared debt repayment agreement brings order to the situation of both parties. You receive a clear action plan, while the creditor receives information about how the obligation will be settled.

>> Learn more about the debt collection process:

A conversation about repaying debt through a settlement may help, among other circumstances, when:

• you have received a letter or message concerning a debt,
• you know the obligation exists but have not yet agreed on how to repay it,
• your income does not allow you to pay the full amount in one payment,
• you want to put several monthly expenses in order,
• your previous financial situation has changed,
• you want to resolve the matter amicably.

You do not have to wait until you have accumulated the entire amount needed to repay the debt. Making contact earlier allows you to learn about the available options and discuss a solution calmly. If you have received correspondence from EOS Poland, you can contact an adviser or review the information available in the EOS Online portal.

One of the greatest advantages of a debt repayment settlement is transparency. The document states the instalment amount, the payment due date and how long repayment will take under the schedule.

As a result, you do not have to wonder each time how much to pay. You can record the dates in your calendar, set reminders or schedule the payment for after the day on which you receive your salary.

Clear rules reduce the risk of mistakes and help you understand the entire process better. If any wording in the documents is unclear, contact an adviser and ask for it to be explained in plain language.

The instalment amount in a debt repayment agreement should take into account not only your income, but also your basic living costs. Committing to an amount that is too high may lead to difficulties after only a few weeks. Before the conversation, it is safer to check how much you can regularly allocate to repayment.

Review:

• your monthly salary and other regular income,
• housing costs and bills,
• expenses for food, medication and transport,
• instalments on other obligations,
• a small reserve for unforeseen situations.

When discussing a debt repayment settlement, provide realistic information. An individual repayment plan should support regular repayment of the obligation, rather than being based on an amount that you cannot maintain over the following months.

A regular instalment is easier to include in a budget than unplanned payments made on different dates. Knowing the schedule allows you to allocate funds more effectively between basic needs, bills and debt repayment.

A simple list of monthly expenses may be helpful. First record your regular income, then your living costs and the instalment resulting from the settlement. This will help you notice sooner whether a problem may arise in a given month.

A settlement with a creditor supports financial control, but it does not replace regular budget reviews. If your income falls or a major unexpected expense arises, contact the creditor before the next payment is due.

Making contact and talking gives you an opportunity to clarify the situation instead of avoiding the subject. You can check what the debt relates to, learn its current amount and agree on a possible repayment method.

An amicable solution requires cooperation from both parties. After entering into a settlement, it is important to pay instalments on time and respond when difficulties arise. A missed payment combined with a lack of contact may mean that the terms of the agreement are not carried out as planned.

A settlement can therefore become the beginning of a gradual return to a sense of financial security. Each paid instalment brings you closer to resolving the matter.

EOS Poland allows you to agree on the terms of a debt repayment settlement when contacting an adviser, as well as independently through the EOS Online portal. The portal allows you to review information about the debt, see available settlement proposals, monitor the schedule and make online payments.

The online process may look as follows:

• Create an account or log in to EOS Online – have your case number and the information needed to verify your identity ready for registration.
• Review the case and the available proposals – if the portal does not allow you to choose the terms independently, you will be informed that telephone contact is required.
• Open the full settlement document – read the document and the attached schedule.
• Make a decision – you can accept the proposed terms or choose not to enter into the settlement online.
• Confirm the settlement as instructed – check that all details and terms are correct.
• Keep the document – download a copy of the debt repayment settlement and store it together with your payment confirmations.
• Repay the debt according to the schedule – in the EOS Online portal you can monitor due dates and make payments.

Each settlement concerns a specific case. If you have more than one obligation handled by EOS Poland, the remaining cases may require separate arrangements.

Not every situation can be resolved entirely online. In that case, contact EOS Poland and speak with an adviser about the available options. The aim of the conversation is to find a solution that allows you to begin regular debt repayment under clearly defined rules. 

Learn more about working with EOS Poland: How does the EOS Poland debt collection company operate?

• Does a settlement always mean repaying the debt in instalments?

A settlement may provide for repayment in instalments, a one-off payment or another method of settling the obligation agreed by both parties. The exact rules follow from the wording of the particular agreement. Before accepting it, check the amount, due dates and all terms.

• Can the terms of a settlement be changed?

Changing the terms of a settlement requires contacting the creditor and making new arrangements. Do not change instalment amounts or due dates on your own. If you see that you may have difficulty following the schedule, make contact as early as possible and describe your current situation. Contact alone does not guarantee that the terms will be changed, but it allows you to check the available options.

• Can a settlement be entered into at a later stage of the case?

The possibility of entering into a settlement depends on the circumstances, the current stage of the case and the creditor’s decision. It is worth making contact as early as possible, but even at a later stage you can ask about the available repayment options. An adviser will review your case and explain which options are available at that time.

• What should you do after paying the final instalment?

After making the final payment, check that it has been posted correctly and that the outstanding balance is zero. Keep the settlement, the schedule and the payment confirmations. If you have any doubts, contact the creditor and ask for confirmation that the case has been settled.