Default FAQ

Have more questions? Submit a request

This is the article that explains everything you need to know about the Default process. In this article you will find answers to the following questions:

  1. What constitutes a customer being in "Default"?

  2. What happens once a customer is declared in default?

  3. What will be the consequences if my partner is defaulted?

  4. How long will xChange provide operational support after a default is declared?

  5. Regarding the legal measures or collection efforts made by xChange, what is the timeline? 

CONTAINER 4 copy.png

1. What constitutes a customer being in "Default"?

A customer is considered in "Default" when they are unable to repay outstanding debts. This includes, but is not limited to, the following situations outlined in the Terms of Use:

  • The Customer has filed for bankruptcy in court.
  • The Customer lacks an active business or trading license.
  • The Customer is declared in default by xChange.
  • A fraud case involving the customer has been identified.
  • xChange has initiated legal proceedings against the Customer to recover a debt.
  • The Customer is subject to international sanctions.
  • The Customer is affected by force majeure.

2. What happens once a customer is declared in default?

Once a customer meets any of the criteria for default, xChange initiates the formal default declaration procedure. This includes several key actions:

  • The defaulting customer will be subject to the terms outlined in paragraph 11 of the xChange Leasing Payment Handling Terms and Conditions. xChange will stop crediting amounts to the respective partners from the moment of default declaration, and insurance coverage for affected containers will be terminated.
  • The defaulting customer will be automatically blocked from engaging in new business on the xChange platform. xChange will promptly and efficiently unwind the business relationship with the defaulting customer.
  • The declaration of default, triggers the calculation and invoicing of the total outstanding value of all non-returned equipment owed by the defaulting customer. The outstanding value can be reduced by the successful return of leased units, which leads to the cancellation of the DRV amount for the returned units. The supplier involved in the leasing deals is obligated to accept the return of DRV-invoiced containers at agreed drop-off locations.
  • Affected parties retain the right to continue charging per diems and ongoing credits directly to the defaulting customer without xChange's support.
  • xChange will push for operational resolution of the deals affected by a customer default for up to two months following the default declaration. After two months, the case is handed over to Finance/Legal who will pursue financial resolution (e.g., also by involving collections agencies or local legal support).
  • Acting as the commercial agent of the container owner, xChange will, at its discretion, undertake appropriate pre-legal and legal measures to collect outstanding amounts. This is done to create pressure on either finding an operational resolution from the user or to collect outstanding (specifically DRV).

 

3. What will be the consequences if my partner is defaulted?

The following are the consequences concerning defaulted partners on the platform which have a significant impact on your agreements as well as the guarantees on the xChange Leasing platform: 

  • Cessation of xChange's obligation to credit amounts to the Supplier or User from the date of default.
  • Termination of insurance coverage for affected containers.
  • Automatic blocking from engaging in new business on the xChange platform.
  • Invoicing of the total outstanding value of non-returned Equipment.
  • Ongoing charges and credits are applied directly by the affected parties.
  • Limited operational support from xChange for two months post-default declaration.
  • The case is handed over to a collections agency to recover outstanding debts and legal steps are taken up in specific cases.

 

4. How long will xChange provide operational support after a default is declared?

xChange will continue to offer operational support for deals affected by a customer default for up to two months following the declaration of default. This support period is in place to ensure issues are resolved operationally i.e. with the return of the units from the user within a reasonable timeframe. After two months, the case is handed over to Finance/Legal who will pursue financial resolution (e.g., also by involving collections agencies or local legal support).

5. Regarding the legal measures or collection efforts made by xChange, what is the timeline? 

There is no specific timeline as each default is subject to circumstances that are not exactly like the other. We cannot give you a specific timeframe, however, xChange retains the obligation of giving you relevant updates which are concrete outcomes worth noting from the relevant third parties. The frequency of such outcomes is highly dependent on the specific cases.

CONTAINER 2.png

Articles in this section

Was this article helpful?
0 out of 0 found this helpful
Share

Comments

0 comments

Please sign in to leave a comment.