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A debt settlement agreement is a document that formalizes the renegotiation or settlement between a debtor and a creditor. It typically results in a reduction or elimination of the original debt amount, allowing the creditor to forgive part of the debt. This agreement usually requires the debtor to make a final payment, after which the creditor waives any further obligations of the debtor under the original contract. Additionally, the creditor agrees not to pursue any actions against the debtor related to the original debt agreement.