How partial payments and settlements work
Jul 21, 2026 · 1 min read
Partial payments keep files alive; settlements close them. When each makes sense.
Not every recovery is a lump sum, and insisting on one often converts a partial recovery into no recovery at all.
Partial payments
A partial payment reduces the balance immediately and demonstrates the consumer is engaging. The account stays active and the notice series continues unless an arrangement is agreed. Fees are charged against each payment at the tier in force when it arrives.
Installments
Where a balance is too large to clear at once, buy-now-pay-later underwriting (Affirm, in this platform) can convert it into monthly amounts. The creditor receives the full agreed recovery; the consumer's schedule is the lender's concern.
Settlements
A settlement resolves the account for less than the full balance. It works best on older files where the alternative is a return of the account uncollected. Once a settlement amount is authorised, it appears on the consumer's payment page as a one-click option, and paying it closes the file.
The comparison that matters
Compare each option against the realistic alternative, which is usually zero — not against the face value of the debt.