FINANCE GUIDE

Sharing Wisdom of Finance Domain

About

Finance Guide Blog shares articles on concepts of finance. It is our distinct collection of lucidly written finance articles. Financial articles published on this blog are mainly compiled with an intention to serve academic, business, personal and professional needs. Our endeavor is to cover many aspects of finance and help our curious readers assimilate its complexities with ease, convenience and clarity.

Authors

Majority of articles published on Finance Guide Blog are compiled and authored by Prof. Mudit Katyani. Data is organized under the guidance and research of our fellow economist Dr.David D'Souza. Some articles on finance are also contributed by our guest bloggers, Gaurav Akrani and Manoj Patil. Here, we all promise to deliver our best.

Welcome to Finance Guide Blog, a free quality resource on concepts of finance and our sole online destination to share financial-experiences.

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What is Debt Settlement? Meaning, Definition, Benefits

What is debt settlement?


Before initiating our discussion regarding what is debt settlement?s First let's revise the meaning of two words it is made of.

Debt settlement is a union of two words namely:

  1. Debt and
  2. Settlement.

The individual meaning of these two words is as follows:

  1. Debt means the total amount of money borrowed by an entity like an individual, company, firm, and so on.
  2. Settlement implies an agreement between two or more parties to resolve issues between them.

So based on the above understanding now let's try to conclude the meaning of debt settlement.

Debt settlement means to make an agreement or do a settlement in relation with the sum of money borrowed and lent between the parties.

Debt settlement acts as a relief from the burden of debt, and it is also an alternative solution to the worst case of bankruptcy (insolvency).

what is debt settlement

Figure 1. What is debt settlement? Image credits © Prof. Mudit Katyani.

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What is Debt? Meaning, Definition and Examples of Debt

Meaning of debt


Before we begin to comprehend the meaning of debt, first let's briefly discuss its etymology (i.e. origin or history of words).

The English word debt has its origin in Latin word debitum, which means to owe something to someone.

Here, in context of above sentence:

  1. Something can be money, articles, promissory note, etc.
  2. Someone is used to refer to an individual or entity that does the activity of lending (giving).

The following image depicts this origin of English word debt.

what is debt

So, what is debt? Let's understand its meaning:

  • Debt is a current obligation or due at present on a debtor. It is supposed to be settled or repaid in the future.
  • Debt settlement is a way to keep up or fulfill borrower's (debtor's) promise of repayment made to the lender (creditor).
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Welcome Message to Website Finance Guide Blog (FGB)

Welcome Message to Website


Welcome to website Finance Guide Blog,

It gives us (authors) immense pleasure and great excitement to launch a blog (website) entirely dedicated to a mission of simplifying and lucidly explaining the complicated concepts of finance.

We have already planned a long journey of commitment, dedication and sincerity in executing our role in rendering the well-researched information to curious knowledge seeking individuals like you.

Here, our main objective is to help people educate themselves on various finance-related matters linked either directly or indirectly to their businesses, academics or personal lives.

Image credits © Prof. Mudit Katyani. Welcome Message to Website.

welcome message to website

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