– Debt settlement
Debt settlement is also known as debt resolution, debt reduction or debt negotiation. It is a settlement or a process of negotiation with debtor’s unsecured creditors.
As soon as settlement is finalized, terms of the settlement should be put in writing. As long as the debtor does everything to live up to the agreement or negotiation, no outstanding debt will arise on the former debtor’s credit report.
Debt settlement is the process of negotiating with the creditors to reduce the overall debt in return for a lump sum payment or series of payments. A successful settlement occurs only when the creditors agree to forgive a certain amount of total account balance.
It is important to note that even if the collection account has been resolved and indicates resolution on the credit report, as per the request of the consumer, as agreed during negotiation, the negative marks from the actual credit card company may still be there and can remain.