[Direct answer]In the Beijing area, it is legally valid to agree to perform the settlement agreement in installments. According to the "Interpretation of the Supreme People's Court on Several Issues Concerning the Execution of Settlement Agreements" (effective from March 1, 2018, and amended in December 2020), after the execution settlement agreement reached by the parties is legally established, the court may order a stay of execution; if one party fails to perform or performs incompletely, the other party may apply to resume the execution of the original effective legal document, and the part already performed shall be deducted. The installment terms, interest arrangements, and even the agreement that "any breach of contract in any installment will accelerate the maturity of the remaining debt" all fall within the scope of the parties' autonomy of will, and are generally recognized in judicial practice. It is recommended to specify the amount of each installment, the performance period, the consequences of breach of contract, and the provisions for resuming the execution in the agreement, and to retain the original agreement and performance certificates to provide a remedy for the situation of interrupted supply.

I. Problem background and typical scenarios

These types of issues often arise in several situations: First, the debtor is temporarily experiencing financial difficulties and hopes to resolve the matter in installments, but the creditor worries that this is a delaying tactic. Second, the parties agree to a payment plan during enforcement, but are unsure whether the agreement needs to be submitted to the court. Third, the installment terms do not specify the consequences of default, and the creditor is unsure whether they can claim all remaining funds in one go after the debtor stops making payments. Fourth, if the debtor reneges on partial performance after reaching a settlement, how should the amount for resuming enforcement be calculated? Fifth, if the mediation agreement or judgment itself stipulates installment payments, can the parties still reach a settlement during enforcement? In enforcement cases in the Beijing area, the success rate of installment settlements is relatively high. The design of the terms determines the subsequent level of protection, which can be used as a reference.Creditor's rights and debts, and enforcement casesColumn.

II. Key points of contention

Focus One: The legal effect of the settlement agreement. It is not a new basis for enforcement in itself. If the agreement is not implemented, the party concerned can only apply for resuming the enforcement of the original document, unless rights are confirmed through separate litigation. Focus Two: The significance of submitting the agreement to the court or recording it in the minutes, which affects the procedural connection between the suspension of enforcement and the resumption of enforcement. Focus Three: The legal effect of the accelerated maturity clause, which stipulates that if there is a default in any period, the remaining amount will mature immediately. In practice, this is generally supported. Focus Four: The scope of resuming enforcement. The portion already performed should be deducted, and whether the delay interest can be claimed together. Focus Five: Whether the property can continue to be sealed during the settlement period. After the suspension of enforcement, the sealing measures usually continue but are not disposed of. Focus Six: Whether the original debt is extinguished after the settlement agreement is fully implemented. Specifically, the current effective laws, regulations, and judicial rulings shall prevail. For debt restructuring of enterprise entities, other issues may also be involved.Business and contract disputes in enterprisesmatters.

III. Professional analysis by Henglue Law Firm

How to design installment terms that offer both flexibility and protection? A mediation case of a private loan dispute handled by our firm provides a model. The plaintiff, Xiao Li, is an operator of a lottery store. Since 2017, the defendant, Xiao Zhang, has frequently purchased lottery tickets from her. Starting from early 2019, Xiao Li repeatedly provided him with advance funds for lottery purchases until the end of 2023. During this period, Xiao Zhang borrowed money from her on various pretexts such as his child's illness, project payment, and rent, but failed to repay the loans on schedule. Xiao Li entrusted our firm's lawyers to protect her rights and claimed the repayment of the principal of 861,990 yuan and the overdue interest, which was calculated based on the benchmark interest rate of the loan market from August 15, 2023 to the actual payment date. Through court mediation, the parties reached an agreement: Xiao Zhang would repay the principal of 830,000 yuan in four installments, namely 230,000 yuan before September 20, 2024, 200,000 yuan before December 20, 2024, 200,000 yuan before June 30, 2025, and 200,000 yuan before December 31, 2025. If any installment was not paid in full and on time, Xiao Li would have the right to apply for forced execution of all outstanding payments. This "accelerated maturity of default and application for enforcement of all remaining payments" clause is the core guarantee of the installment arrangement - it not only gives the debtor breathing room, but also ensures that the creditor does not need to claim each installment separately when the supply is cut off, allowing the case to proceed directly to enforcement. This case was handled by Beijing Henglu Law Firm.Tian Jia YanThe attorney (practice certificate number: 11101202111381309, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action suggestions: 1. Before entering into a phased settlement, clarify the other party's true repayment capacity to avoid a futile attempt to trade time for space; 2. Specify the amount for each phase, the exact due date, and the receiving account in the agreement to avoid ambiguous terms causing disputes; 3. Ensure the inclusion of a clause on accelerated maturity in the event of default, stipulating that any default in one phase allows the recovery of enforcement for the remaining amounts; 4. Clearly define who will bear the interest on overdue payments and the costs of realizing the creditor's rights; 5. Submit the settlement agreement to the enforcement court or request its entry into the minutes to formalize the procedural connection; 6. Retain the seizure measures until all phases are fulfilled, releasing them sequentially based on each phase's performance. Legal basis: - The "Interpretation of the Supreme People's Court on Several Issues Concerning Enforcement Settlements" (effective March 1, 2018, amended in December 2020) regulates the establishment of settlement agreements, suspension of enforcement, and resumption of enforcement; - The "Civil Procedure Law of the People's Republic of China" (amended on September 1, 2023, effective January 1, 2024) establishes the basic framework of enforcement procedures; - Article 577 of the "Civil Code of the People's Republic of China" (effective January 1, 2021) provides the general basis for breach of contract liability. For similar designs involving mediation-based phased payments, refer to the following resources:Business and contract disputes in enterprisesColumn.

5. Henglu Law Firm's Reminder

Risk warning: First, do not make excessive concessions to facilitate a settlement. The amount of relief and the length of installment payments should be matched with the other party's repayment ability and guarantee measures; Second, installment agreements lacking accelerated maturity clauses can only resume enforcement period by period after the supply is cut off, which is costly and passive; Third, during the settlement period, pay attention to monitoring the other party's property changes to prevent them from transferring assets during the installment window period; Fourth, try to add guarantors or mortgages to the settlement agreement to strengthen the obligation to perform. It is recommended that lawyers review the terms during the design stage and provide advice.Beijing Henglu Law FirmOn the official website, the similar columns arrange the installment payments into an actionable level.

VI. Frequently Asked Questions

Q1: Is the execution of the installment agreement binding on both parties?

It is binding. The execution and settlement agreement established in accordance with the law is binding on both parties. The debtor shall perform in accordance with the agreed time limit and amount; if the agreement is submitted to the court or recorded in the minutes, the execution procedure shall be suspended. However, the settlement agreement itself is not the basis for execution. If one party fails to perform, the other party may apply to resume the execution of the original effective legal document, and the part that has been performed shall be deducted.

Q2: What should be included in the installment agreement?

It should specify the total debt and the amounts for each period, the exact performance period and the receiving account for each period; the liability for breach of contract and the accelerated maturity clause, that is, any breach of contract in any period may lead to claims for the entire remaining amount; the interest on delay and the assumption of expenses; whether to provide guarantors, mortgages and other credit enhancement arrangements; and the way to connect the agreement with the original enforcement case, such as submitting it to the court or recording it in the minutes. The more specific the terms are, the stronger the subsequent protection will be.

Q3: What should I do if the other party stops making payments in installments?

First, send a written reminder and keep the proof of delivery; if the other party still fails to perform after the reminder, apply to the court for resuming the enforcement of the original effective legal document according to the agreement. If the agreement includes an accelerated maturity clause, you can claim all the remaining unpaid amounts together; the part that has been performed shall be deducted. At the same time, you can check the changes in their assets to prevent the transfer of assets, and if necessary, apply for restricting high-consumption and adding them to the list of untrustworthy individuals to put pressure on them.

Q4: How long does the entire cycle take after reaching an installment agreement?

Depending on the agreed installment length and the performance of the obligations. After the agreement is signed, the enforcement procedure is suspended. If all obligations are performed on schedule, the case will be closed with the settlement being fully implemented; once the supply is interrupted, the court will generally take enforcement measures within six months after the application for resumption of enforcement. When designing the installment plan, it is necessary to reserve sufficient time for enforcement in the worst-case scenario, and at the same time, to maintain clues to the debtor's assets and guarantee measures.

Q5: How should we proceed now?

The first step is to assess the other party's solvency and the possibility of providing guarantees, and determine the installment amount; the second step is to draft a settlement agreement containing accelerated maturity and expense clauses; the third step is to submit the agreement to the enforcement court or record it in the minutes to fix the procedural effect of suspending enforcement; the fourth step is to collect payments on schedule and keep the receipts. If there is a default in payment, immediately issue a reminder and apply for resuming enforcement; the fifth step is that if you are unsure about the clauses, you can refer to the relevant provisions for guidance.Creditor's rights and debts, and enforcement casesThe content of the column or the consultation will be reviewed by professional lawyers.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm about specific situations.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, in order to avoid missing the statutory time limits. →Legal services for creditor-debtor disputes·Attorney Tian Jiaoyan·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.