What is a debt settlement agreement?

A debt settlement agreement is a legally-binding contract between a consumer and their creditor that outlines how a borrower will repay their debt. Under the agreement, the borrower must commit to a set monthly payment plan. The creditor agrees to accept the payment as full payment for the debt and forgives any outstanding balance. The agreement also typically includes a payment schedule, late payment fees, and other conditions to protect the interests of both parties. In Wisconsin, consumer debt defense law is enacted to ensure that borrowers’ rights are protected and that creditors adhere to a fair and reasonable agreement. This law requires lenders to give borrowers a full disclosure of the terms and an opportunity to negotiate the terms of any debt settlement agreement. Any agreements made must be in writing and must include provisions that benefit the consumer. Some of these provisions include allowing the borrower to make payments without any additional interest or penalties. Consumer debt defense law also requires lenders to inform borrowers if the debt settlement agreement is not approved. In addition, it also requires creditors to provide a period of time for borrowers to dispute any information reported on their credit report. In Wisconsin, debt settlement agreements must be entered into with caution and consideration, as it is essential to ensure that the agreement is fair and reasonable for both parties involved.

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What is a debt settlement agreement?

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