Debt settlement
An agreement under which a creditor accepts an agreed payment or series of payments in resolution of a debt, often for less than the full balance.
Related terms
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Reduced settlement
A negotiated agreement where a creditor accepts less than the full contractual balance in resolution of the debt.
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Full and final settlement
An agreement where a creditor accepts an agreed payment in complete settlement of the debt and gives up the right to pursue the remaining balance, subject to the wording agreed.
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Lump-sum settlement
A negotiated settlement where an agreed one-off payment is made to resolve a debt, often for less than the full amount claimed.
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