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.
Related terms
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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.
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Partial settlement
An agreement where a creditor accepts a payment towards the debt but does not necessarily release the remaining balance unless the settlement terms expressly say so.
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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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