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 financial recovery, 'debt-settlement' can be a strategy to avoid bankruptcy by settling debts for less than the full amount owed. A bankruptcy attorney might advise, 'Considering debt-settlement could be a viable alternative to filing for bankruptcy, depending on your financial situation.'

Practice Scenarios

Business

Scenario:

Our company's debt has been accumulating over the last few months. It's reaching a point where we may need to reconsider our approach to debt management.

Response:

I agree. Perhaps we should consider approaching our creditors for a debt-settlement agreement to ease our financial situation.

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.