Thanks for your reply, Inferno. However, my question is more...

Thanks for your reply, Inferno. However, my question is more around the customer defaulting on their CC where debt recovery proceedings are initiated. The CC at this time would be closed to any use, but if the customer is declaring bankruptcy or is negotiating less than what is owed, how will the merchant be paid the remaining payments?

This would also be a similar scenario for CC fraud which maybe the more common case of default especially if you have a large value item which you can effectively buy with a 1/10th or 1/12th payment to receive the goods and then never pay again.