Do you have the reserve in writing? If so, write to the fin. house and say that you are willing to pay the €5,000 and no more than that.
Make sure that they write off the loss of €3,200 against their profits and not against your account. That will ensure that you are not showing on the Irish Credit Bureau with a bad debt of €3,200.
Also, make sure they don't pull a fast one by selling the shortfall to a third party debt collector.
If they sold for less than the reserve without notifying you, you should make sure they write off the balance outstanding and not report it on the bureau as still outstanding.