Work out debt settlement estimate instantly with clear inputs, formula shown and shareable results.
In a settlement the creditor accepts less than the full balance and writes off the rest. Fees are usually charged as a share of the amount forgiven, so the real saving is the discount less those fees — and the account is marked as settled, not paid.
Settlement cost
Cost = debt × settlement% + (debt - settlement) × fee%
Figures are estimates. Lenders apply their own rounding, fees and eligibility rules, and rates change. This is not financial advice — confirm the numbers with your lender.
Yes. A settled-for-less marker is a serious negative and typically stays on file for years.
In many jurisdictions cancelled debt counts as income, so the tax bill must be part of the comparison.