Debt Settlement - What Exactly Is It?

Individuals that have owed a creditor money for some time (for instance a year or two) may receive an offer to “settle” the debt from the creditor. This means that instead of pursuing full payment of that which is owed, they will accept less than the full balance.

Once the discounted amount is paid, they consider the obligation fulfilled on the account. They then report to the credit bureau which in turn shows the debt as written off.