Debt settlement negotiation works when the creditor negotiates from strength: a legal notice already served, the interest tabulated, the forum identified. FundRaksha's advocate conducts the negotiation, tests the buyer's disputes against documents, and records any settlement in a written agreement secured by post-dated instruments, an acknowledgement of debt and a default clause that revives the full claim. The fee is 30% of what is actually received.
Why negotiation after a notice is different from negotiation before
Before a notice, the buyer negotiates with your sales team, and every concession you make is a signal that more are available. After a notice from an advocate, the buyer negotiates with counsel who has stated the claim with interest and named the forum. The buyer's lawyer, if he has one, will have told him what the forum means: a Facilitation Council award with interest at three times the bank rate and a 75 percent deposit to appeal; a summary suit in which he must obtain leave to defend; a Section 138 complaint with a criminal record at the end. The conversation changes from "how much will you take" to "how quickly can we close this".
That is why FundRaksha always serves the notice first and negotiates second, even when the buyer is already talking.
What a good B2B settlement contains
- Acknowledgement of the debt in a stated amount, signed by an authorised person. This restarts limitation and removes the dispute for good.
- A payment schedule with dates and amounts, short enough to be real. Long schedules fail.
- Security for the schedule: post-dated cheques or NACH mandate for each instalment, so a default is a Section 138 event or an automatic debit, not another negotiation.
- A default clause reviving the full original claim with interest and costs, less amounts paid, if any instalment is missed.
- Interest and discount terms stated expressly: what is waived, and only on full performance.
- No gag on enforcement: the creditor's right to file on default is preserved; where a case is already filed, it is kept alive until the last instalment.
A settlement without these terms is an invitation to default. Our advocates draft every one of them.
When to discount and when not to
| Situation | Our usual advice |
|---|---|
| Buyer solvent, claim undisputed, strong documents | No discount on principal; negotiate only on interest and timing |
| Buyer solvent, genuine partial dispute | Settle the undisputed part now in full; negotiate the disputed part separately |
| Buyer under financial stress, assets limited | Consider a discount for immediate full payment; secure any schedule tightly |
| Buyer heading to insolvency | Take what can be secured now; a resolution plan may pay far less |
| Old debt near limitation | Secure an acknowledgement first, then negotiate |
The advocate gives you a recommendation with reasons. The decision is always yours.
How the FundRaksha settlement process runs
- Free consultation and document review; the claim with interest is fixed.
- Legal notice within 24 hours, so negotiation begins from a served demand.
- Negotiation by the advocate, in writing and by phone, with disputes answered on documents. You are consulted on every proposal.
- Settlement agreement drafted and signed, instruments collected, schedule monitored.
- On default: the instruments are presented and the full claim is filed in the planned forum without starting over.
You pay 30% of what is actually received, as it is received. There is no fee on the settled amount until it is paid. Use the recovery fee calculator to see how a schedule affects the fee timing.
Related
Negotiation is the middle rung of the ladder described in payment recovery. For what happens on default, see summary suit recovery and cheque bounce recovery. For settlement instalments collected automatically, see e-mandate collections. Book a free consultation to start.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.