What is the difference between debt negotiation and debt settlement?

Debt negotiation and debt settlement are two financial solutions that enable people struggling with debt to pay off their accounts at a reduced amount. Both processes involve negotiating with creditors and lenders to lower the amount of debt owed. However, the two strategies are different. With debt negotiation, you may be able to convince lenders to forgive a part of the debt and close the account. This means that you would no longer owe the amount and would not need to make any payments. In contrast, debt settlement involves settling a debt for less than what you owe and then making a lump sum payment to settle the account. Instead of having to pay the entire debt amount, you would agree to pay a lower amount and the account would be considered paid in full. Under North Carolina law, both debt negotiation and debt settlement are governed by the Uniform Debt Management Services Act. This law sets limits on how much debt settlement companies can charge and restricts their ability to provide legal advice. Overall, the distinction between debt negotiation and debt settlement is important to understand. While both options can help you get out of debt, debt negotiation involves forgiving some of the original debt while debt settlement requires that you pay a reduced amount to settle the account.

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What is the difference between debt negotiation and debt settlement?

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