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A debt settlement agreement is a document that formalizes 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. In exchange for the debtor's final payment, the creditor agrees to release the debtor from any remaining obligations and will not pursue further action regarding the original agreement. Additionally, the creditor must waive any claims under the original contract.
