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A debt settlement letter is used to reach an agreement between debtor and creditor to resolve debt, often for a reduced amount. The letter should state intention to pay either lump sum or through a payment plan. Debtor must ensure they can afford the agreed upon amount, or original debt must be paid in full. Letter must include debtor's name, amount to pay, account to pay, and date for payment or reply. Don't send payment without written assurance of debt being settled.
