Set-off (modregning)
Also known as setting off, netting of claims, modregne, udligning af krav
Set-off is when two parties owe each other money and the claims are cancelled against one another instead of being paid.
In practice
If your customer owes you 80.000 kr. and you owe him 30.000 kr., the two claims can be set off against each other: only 50.000 kr. has to be paid.
In a bankruptcy, the right of set-off is worth its weight in gold. It means you get full cover for the part that can be set off — instead of a dividend. If the customer has money owing from you, do not simply pay it out while you stand in the queue yourself.
Where it commonly goes wrong
- You pay out to a customer against whom you hold a claim of your own. Set off instead — it is the only “dividend” that pays 100 %.