What happens to the debt that’s been settled?

When debt is settled through a debt settlement law in Washington, the amount owed is usually less than the full amount originally due. This is because the creditor agrees to accept a reduced amount in order to resolve the debt and eliminate the risk of not getting paid back at all. Once the debt is settled, the creditor writes off the remaining balance. This means they no longer expect to receive payment for the remaining balance and any future payments due on the debt. It also means that the debt will be removed from public records and the credit report, thus improving your credit score. Although the debt has been written off, the borrower is still liable for the reduced amount, and the creditor may take legal action if the borrower fails to pay. Therefore, it is important to make sure you fully understand the terms of the settlement agreement before agreeing to it.

Related FAQs

What documents do I need to provide during a debt settlement process?
Are there any legal risks associated with debt settlement?
What will happen to my credit score after a successful debt settlement?
What if I can’t pay the full amount of a debt settlement?
How do I find out the balance of my debt?
What fees will I pay if I use a debt settlement company?
How do I know if I have been approved for a debt settlement?
Do I need to hire a lawyer to negotiate a debt settlement?
What are the potential consequences of a failed debt settlement?
Is debt settlement a good way to reduce debt?

What happens to the debt that’s been settled?

Related FAQs

Related Blog Posts