A debt settlement agreement is a contract signed between a creditor and a debtor to renegotiate a debt or make compromises. This is usually the case when a person wants to make a final payment for a debt due. The debtor offers a payment below the due date (usually between 50% and 70%) if the payment can be made immediately. This agreement allows both parties to negotiate and reach a consensus on a smaller amount of money that the debtor will pay to pay to pay the debt. In this way, the debtor can afford to repay the debt and reduce its impact on the health of the credit, while the creditor can accept a smaller amount to offset some of its losses. .