diff --git a/backend/src/settlement/entities/user.entity.ts b/backend/src/settlement/entities/user.entity.ts
new file mode 100644
index 0000000..3493229
--- /dev/null
+++ b/backend/src/settlement/entities/user.entity.ts
@@ -0,0 +1,13 @@
+import { Entity, Column, PrimaryGeneratedColumn } from "typeorm";
+
+@Entity("users")
+export class User {
+  @PrimaryGeneratedColumn("uuid")
+  id: string;
+
+  @Column("jsonb", { default: {} })
+  balances: Record<string, number>; // asset → amount
+
+  @Column({ type: "timestamp", nullable: true })
+  snoozedUntil: Date | null;
+}
diff --git a/backend/src/settlement/settlement.controller.ts b/backend/src/settlement/settlement.controller.ts
index f57e429..c8d11fd 100644
--- a/backend/src/settlement/settlement.controller.ts
+++ b/backend/src/settlement/settlement.controller.ts
@@ -1,3 +1,32 @@
+import { Router } from "express";
+import { generateSuggestions, snoozeSettlement, unsnoozeSettlement, verifySettlement } from "./settlement.service";
+
+const router = Router();
+
+router.get("/suggestions", async (req, res) => {
+  const suggestions = await generateSuggestions();
+  res.json(suggestions);
+});
+
+router.post("/snooze", async (req, res) => {
+  const { userId, until } = req.body;
+  await snoozeSettlement(userId, new Date(until));
+  res.json({ success: true });
+});
+
+router.post("/unsnooze", async (req, res) => {
+  const { userId } = req.body;
+  await unsnoozeSettlement(userId);
+  res.json({ success: true });
+});
+
+router.post("/verify", async (req, res) => {
+  const { user, asset, amount } = req.body;
+  const verified = await verifySettlement(user, asset, amount);
+  res.json({ verified });
+});
+
+export default router;
 import { Controller, Get, Post, Put, Body, Param, Req } from "@nestjs/common";
 import { SuggestionEngineService } from "./suggestion-engine.service";
 import { SettlementService } from "./settlement.service";
diff --git a/backend/src/settlement/settlement.repository.ts b/backend/src/settlement/settlement.repository.ts
new file mode 100644
index 0000000..10a7868
--- /dev/null
+++ b/backend/src/settlement/settlement.repository.ts
@@ -0,0 +1,22 @@
+import { AppDataSource } from "../data-source";
+import { User } from "../entities/user.entity";
+
+export const userRepo = AppDataSource.getRepository(User);
+
+export async function findActiveParticipants(): Promise<User[]> {
+  const now = new Date();
+  return userRepo.find({
+    where: [
+      { snoozedUntil: null },
+      { snoozedUntil: { $lt: now } }
+    ]
+  });
+}
+
+export async function updateSnooze(userId: string, untilDate: Date) {
+  await userRepo.update(userId, { snoozedUntil: untilDate });
+}
+
+export async function clearSnooze(userId: string) {
+  await userRepo.update(userId, { snoozedUntil: null });
+}
diff --git a/backend/src/settlement/settlement.service.ts b/backend/src/settlement/settlement.service.ts
index ab05e48..7fe7a7f 100644
--- a/backend/src/settlement/settlement.service.ts
+++ b/backend/src/settlement/settlement.service.ts
@@ -1,3 +1,41 @@
+import { findActiveParticipants, updateSnooze, clearSnooze } from "./settlement.repository";
+import { verifyBalance } from "../utils/stellarVerification";
+import { User } from "../entities/user.entity";
+
+export interface SettlementSuggestion {
+  participants: string[];
+  status: "partial" | "completed" | "invalid";
+  details: string;
+}
+
+export async function generateSuggestions(): Promise<SettlementSuggestion[]> {
+  const participants = await findActiveParticipants();
+  const suggestions: SettlementSuggestion[] = [];
+
+  // Example deterministic logic
+  const total = participants.reduce((sum, u) => sum + Object.values(u.balances).reduce((a, b) => a + b, 0), 0);
+
+  if (total === 0) {
+    suggestions.push({ participants: participants.map(p => p.id), status: "completed", details: "All balances settled" });
+  } else if (total > 0) {
+    suggestions.push({ participants: participants.map(p => p.id), status: "partial", details: "Some balances remain unsettled" });
+  } else {
+    suggestions.push({ participants: participants.map(p => p.id), status: "invalid", details: "Balances mismatch" });
+  }
+
+  return suggestions;
+}
+
+export async function snoozeSettlement(userId: string, until: Date) {
+  await updateSnooze(userId, until);
+}
+
+export async function unsnoozeSettlement(userId: string) {
+  await clearSnooze(userId);
+}
+
+export async function verifySettlement(user: User, asset: string, amount: number): Promise<boolean> {
+  return verifyBalance(user.id, asset, amount);
 import {
   Injectable,
   NotFoundException,
diff --git a/backend/src/settlement/tests/settlement.service.spec.ts b/backend/src/settlement/tests/settlement.service.spec.ts
new file mode 100644
index 0000000..f2da978
--- /dev/null
+++ b/backend/src/settlement/tests/settlement.service.spec.ts
@@ -0,0 +1,25 @@
+import { generateSuggestions, snoozeSettlement, unsnoozeSettlement } from "../settlement.service";
+import { userRepo } from "../settlement.repository";
+
+describe("Settlement Service", () => {
+  it("should generate completed suggestion when balances net to zero", async () => {
+    // mock participants with zero balances
+    const suggestions = await generateSuggestions();
+    expect(suggestions[0].status).toBe("completed");
+  });
+
+  it("should persist snooze state", async () => {
+    const userId = "test-user";
+    const until = new Date(Date.now() + 3600 * 1000);
+    await snoozeSettlement(userId, until);
+    const user = await userRepo.findOneBy({ id: userId });
+    expect(user?.snoozedUntil).toEqual(until);
+  });
+
+  it("should clear snooze state", async () => {
+    const userId = "test-user";
+    await unsnoozeSettlement(userId);
+    const user = await userRepo.findOneBy({ id: userId });
+    expect(user?.snoozedUntil).toBeNull();
+  });
+});
diff --git a/backend/src/utils/stellarVerification.ts b/backend/src/utils/stellarVerification.ts
new file mode 100644
index 0000000..299dee5
--- /dev/null
+++ b/backend/src/utils/stellarVerification.ts
@@ -0,0 +1,9 @@
+import { Server } from "stellar-sdk";
+
+const server = new Server("https://horizon-testnet.stellar.org");
+
+export async function verifyBalance(accountId: string, asset: string, expected: number): Promise<boolean> {
+  const account = await server.loadAccount(accountId);
+  const balance = account.balances.find(b => b.asset_code === asset);
+  return balance ? Number(balance.balance) >= expected : false;
+}