A Plaintiff That Allows a Defendant to Pay in Installments Should Insist on an Appropriate Penalty in the Event of Default.

A defendant at a mediation will often lack the ability to make a lump sum payment sufficient for plaintiff to agree to a settlement, so a settlement can be had only if plaintiff agrees to allow defendant to make some number of installment payments. Where feasible the plaintiff may demand an enhanced lump sum down payment. A plaintiff that agrees to accept installments should always insist on the right to obtain a judgment in the event of default, based on an affidavit attesting to nonpayment, in an agreed penalty amount higher than the total agreed settlement amount, less payments made.


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Bankruptcy Mediation is a treatise published by the American Bankruptcy Institute