A settlement instalment was missed after the first two were paid

Some of the settlement has been performed

A hypothetical debtor pays two instalments under a settlement and misses the third. The creditor immediately prepares a demand for the entire original invoice balance without deducting the receipts. Reconcile the payments and obtain advice on the deed before deciding what amount to pursue. A missed instalment does not justify guessing how earlier payments or the original debt should be treated.

Build a payment schedule from evidence

List each instalment, due date, receipt date and amount received. Include any agreed changes and disputed allocations. Match the schedule to bank records rather than relying only on reminders from the collection system. If a payment was reversed or returned, preserve both entries so the adviser can understand the full sequence.

Read the settlement terms together

Business.gov.au's contract guidance supports clear obligations and appropriate review of terms. Ask the lawyer how the deed treats missed instalments, prior payments and any claim to an earlier balance. This article does not assume acceleration or revival of the original debt. The result depends on the actual wording, performance and applicable legal circumstances.

Source: business.gov.au: Prepare a contract

Identify the calculation being proposed

In the hypothetical example, distinguish unpaid settlement instalments from the larger historic invoice amount. Ask the adviser to explain the basis of any proposed demand and how receipts are credited. Do not add unagreed charges simply because the payment plan failed. A clear calculation should show every component rather than one unexplained total.

Keep negotiations consistent with the advised position

If the debtor requests another extension, provide the request to the lawyer before making a new commitment. Record any proposal separately from an accepted variation. Avoid telling one contact that the old plan continues while another is preparing incompatible enforcement steps. The business needs one authorised account of what has happened and what it now proposes.

Maintain the evidence of partial performance

Retain the deed, revised terms if any and reconciled receipt history together. CRP can help organise the commercial figures for review. Accurate credit for payments already made supports a proportionate response and prevents the breach discussion from obscuring the settlement's actual performance.