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What's a debt settlement agreement?
When a borrower defaults on a loan, that default can become a source of stress and conflict for all parties. That's where a debt settlement agreement comes in—rather than chasing down or avoiding payments, the parties can use this document to come together and renegotiate terms. The goal is to establish new rules that make sense for all concerned, so defaults can be avoided in the future.
Some people also call this a:
Debt settlement letter
Who it's coming from
Determine if a business or individual is sending the doc and have the name and contact info ready.
Who it's going to
Know who this doc is going to and have the individual or business name and contact info ready. If it's a business, make sure you know the business type (LLC, corporation, etc.).
Which state will govern it
Specify a state so it's clear what laws apply to the document.
Have information about the amounts paid and debts owed.