When to use it
Use it the moment a debtor acknowledges the debt and wants to pay over time. It is the most underrated document in debt collection: same conversation, same instalments — but with the enforcement clause the agreement is an enforceable instrument, and you can go straight to the bailiff's court if it is broken. No court case, no judgment, no payment order.
It has to be right
The wording is rarely the problem. It is the deadline, the fee and what the letter leaves out — and the mistake costs you the expenses, not the debtor.
- The enforcement clause MUST be included — without it the document is merely an agreement
- The debtor must acknowledge the debt expressly and by amount
- Agree that the entire outstanding balance falls due at once if an instalment is missed
- Decide on the interest — otherwise default interest keeps running on the outstanding balance
- Get it signed. An email thread is not a settlement
How to fill it in
Most placeholders are trivial. These are not.
- Clause 5 — the enforcement clause
- NEVER delete it. Without that express provision the settlement is merely an agreement, and you will have to go all the way through the courts anyway. It is the whole difference between this document and a payment agreement.
- [INSTALMENT]
- Set an amount the debtor can realistically keep up. A settlement that breaks down in month two has cost you nothing but time — and a second negotiation is harder than the first.
- Clause 3 — the interest
- Make a decision. If you do not, default interest keeps running on the outstanding balance for the whole repayment period, and the debt grows while the debtor pays.
- Clause 4 — default
- Without it, only the missed instalment falls due. With it, the entire outstanding balance falls due, and you can go to the bailiff's court for the full amount.
Frequently asked questions
What is the difference between a voluntary settlement and a payment agreement?
The enforcement clause. A payment agreement is a promise — if it is broken, you have to go to court first. A voluntary settlement with the clause is an enforceable instrument: you go straight to the bailiff's court. The two cost exactly the same to enter into.
Does the settlement have to be entered into before the court?
No. That is the whole point — it can be entered into out of court, long before any case has been brought. A settlement entered into before the court is called a court settlement (retsforlig) and has the same effect.
Does the settlement interrupt the limitation period?
Yes. The debtor's written acknowledgement of the debt interrupts limitation, and a new period runs from the signature. The settlement therefore does two things at once.
Can I use it if the debtor is a company?
Yes — but have it signed by someone who can bind the company, and consider asking the owner for a personal guarantee at the same time. If the company goes bankrupt, a settlement against the company is worth nothing.
How to use it
Legal disclaimer. The template is generic and free to use. It is not legal advice and does not take account of the circumstances of your particular case. Rates, deadlines and statutory references change — check them before you use the document. If the claim is large, disputed or heading for court, call us before you send anything.