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A debt settlement agreement confirms the renegotiation of the original terms between the debtor and creditor. It typically reduces or eliminates the debtor's original debt, allowing the creditor to forgive part of it and release the debtor from any remaining obligations. This agreement is often finalized after the debtor makes a final payment. Following the settlement, the creditor must remove any obligations of the debtor under the original contract and agree not to pursue any actions against the debtor related to the original agreement.
