debt-settlement

Vocabulary Word

Definition

'Debt-settlement' is when a person or company owes money and makes an agreement with the lender that they can pay back a lesser amount. It helps the debtor reduce their financial burden by paying only a portion of their debt and the lender to get some repayment instead of nothing.

Examples in Different Contexts

In credit negotiations, 'debt-settlement' involves negotiating with creditors to accept a lump sum payment that is less than the total amount owed. A financial negotiator might explain, 'We aim to reach a debt-settlement agreement that reduces your total debt, allowing for a more feasible repayment solution.'

Practice Scenarios

Tech

Scenario:

Our expenses have been escalating, and we've used up most of our funding. We might need to negotiate terms with our creditors.

Response:

I agree, getting into a debt-settlement agreement with our vendors can help mitigate our current financial strain.

Financial Services

Scenario:

Your debt-to-income ratio is quite high. You should consider options that can reduce your financial obligations.

Response:

You're right, and I think a debt-settlement might be a viable strategy to alleviate my debt burden.