What are the differences between debt relief law and debt settlement?

Debt relief law and debt settlement are both processes that can help relieve financial stress caused by debt, but they vary in some important ways. Debt relief law involves the negotiation of a legally binding agreement that is structured to reduce a person’s overall debt or to restructure payments of the existing debt to more manageable levels —in Kansas, this agreement is known as an “Order for Protection from Creditors”. The agreement protects the debtor from further collection activity, and once it is approved by the court it is legally binding. Debt settlement, on the other hand, is often conducted by companies who negotiate with creditors on behalf of the debtor to settle the debt for a lesser amount than what is owed. The debtor then pays the reduced amount to the creditor, and the debt is satisfied. However, debt settlement companies may charge high fees, and only certain types of debt are eligible for settlement. In summary, debt relief law includes legally binding agreement and protection from creditors, while debt settlement is more of an informal negotiation between the debtor and creditors. Debt relief law is regulated by the state and is handled through the courts, while debt settlement is usually managed by third-party companies and is often accompanied by high fees.

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What are the differences between debt relief law and debt settlement?

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