What is a debt relief offer and how does it work?

Modified on Tue, 18 Apr 2023 at 10:29 PM

A debt relief offer is an agreement between you and a company that owns your debt. These can also be called money-saving offers, settlement offers, or discounted offers. 

With a debt relief offer, your creditor agrees to forgive a portion of your debt if you repay the rest by a certain date. For example, if you owe $500 to a creditor and you agree to pay $300 by a certain date, they may agree to forgive the remaining $200. 

If you repay the offer in-full and on-time, your creditor will forgive the remaining balance of your debt and you will no longer owe them any money for that account. However, if you don’t make your payments on-time the creditor is not obligated to forgive the remaining balance and may resume collection activities. Many offers include affordable monthly payment plans. 

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