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A debt settlement agreement is a document that confirms the renegotiation or settlement between a debtor and creditor. It typically reduces or eliminates the original debt amount, allowing the creditor to forgive part of the debt and release the debtor from further obligations. This occurs after the debtor makes the final payment outlined in the agreement. Additionally, the creditor is required to waive any claims against the debtor related to the original contract, preventing further actions such as auctions against the debtor.