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A debt settlement agreement confirms the renegotiation of terms between a debtor and creditor, typically reducing or eliminating the original debt amount. This agreement permits the creditor to forgive a portion of the debt, releasing the debtor from any remaining obligations. In return, the debtor makes a final payment to the creditor after the settlement is executed. The creditor is then required to remove any obligations under the original contract and relinquish the right to pursue any further action against the debtor related to the original agreement.
