Is debt settlement reported to credit bureaus?

In North Carolina, debt settlement is usually reported to credit bureaus. When a person settles a debt, he or she is agreeing to a new contract with the creditor that states that the original debt will be reduced or eliminated in exchange for a lump sum payment. The creditor will then report this settlement agreement to the credit bureaus. In some cases, a negative impact to the person’s credit score might be expected in the short-term, as the debt settlement agreement will be listed as a negative event that occurred with the new creditor. However, once the settlement agreement is fulfilled and the debt is officially classified as “settled” or “paid in full”, the credit score should begin to recover. It is important to note that state laws regarding the reporting of debt settlement to credit bureaus can vary, and thus it is best to consult with an attorney or financial advisor when considering a debt settlement agreement. Furthermore, debt settlement can be a complicated process, and thus it is important to be aware of all the associated risks and regulations before entering into such an agreement.

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Is debt settlement reported to credit bureaus?

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