Debt Settlement
/ˈdɛt səˌtlmɛnt/
Definitions
- (n.) A negotiated agreement in which a debtor agrees to pay a creditor less than the full amount owed to resolve a debt obligation.
The company reached a debt settlement with its creditors to avoid bankruptcy.
- (n.) The process of resolving a debt dispute through negotiation, often involving compromise on payment terms or amounts.
Debt settlement can be an alternative to formal bankruptcy proceedings.
Forms
- debt settlement
- debt settlements
Related terms
See also
Commentary
Debt settlement is distinct from debt forgiveness as it usually involves some repayment; clarity in drafting should specify whether an agreement discharges the entire debt or modifies payment terms.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.