What is a debt settlement agreement?

A debt settlement agreement is an agreement between a creditor (the party owed money) and a debtor (the party owing money) to settle a debt for an amount that is less than the full amount owed. It is usually a voluntary agreement between the parties that is negotiated by a third-party organization, such as a consumer debt defense law firm. The agreement will set out the terms of the settlement - the total amount agreed to be paid, the payment timeline, and the consequences if the payments are missed. It may also set out the consequences of any future default on payments, such as additional interest or fees. Both parties should be aware of their rights and obligations under the agreement before signing. The debtor should also understand that any arrangements with a creditor for debt repayment will be reported to the credit rating agencies and will remain on their credit report for up to seven years. In Oregon, consumer debt defense lawyers can help negotiate a debt settlement agreement with creditors on behalf of the debtor. This can help protect the debtor’s rights and ensure the payment is as fair and reasonable as possible. The debt settlement agreement will then be legally binding and will serve as proof of the agreed-upon terms.

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What is a debt settlement agreement?

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