What is a debt settlement?

A debt settlement is an agreement between a debtor (the person owing money) and a creditor (the person to whom money is owed) that allows the debtor to pay less than what they owe. In South Carolina, these agreements are usually reached through negotiation and are legally binding. In some cases, the creditor may agree to forgive a portion of the debt or to accept a lump sum payment in full satisfaction of the debt. In most cases, debt settlement involves reaching a mutual agreement on the amount of debt that will be paid, as well as the terms and conditions of payment. For example, the creditor may accept a reduced amount in exchange for a lump sum payment, or may offer a lower interest rate on the debt in exchange for an agreed upon amount to be paid in smaller installments over time. The terms of the agreement are often negotiable and can be adjusted based on the needs of both the debtor and creditor. The goal of debt settlement is to resolve a debt in a way that is mutually beneficial to both the debtor and creditor. This is an important way to address debt issues, as it can help a debtor avoid bankruptcy while still paying off their debts over time. It is important to note, however, that debt settlement does not always result in a complete discharge of the debt, and creditors are not obligated to accept any proposed settlement.

Related FAQs

What are the defenses available to debtors in a lawsuit?
What is an injunction?
What is a cease and desist letter?
What are the risks associated with debt consolidation?
What is a debt settlement?
What is a temporary restraining order?
How does a creditor collect a debt from a third party?
Can creditors report a debt to the credit bureaus?
What are the consequences of not paying a debt?
How does a creditor sue a debtor?

What is a debt settlement?

Related FAQs

Related Blog Posts