Debt settlement

Debt settlement is when you owe a lot of money to someone, but you can't pay it all back. It's like having a giant cookie, but there's no way you can eat the whole cookie by yourself. So, you ask if you can only eat half of the cookie and give the other half back.

In debt settlement, instead of giving back half of the cookie, you offer to pay a smaller amount of money to the person who you owe money to - this is called your creditor. Your creditor might agree to the smaller amount, but they might not. It depends on how much money you owe and how much you are offering to pay them back.

If your creditor agrees to the smaller amount, then you can pay them back and the debt is settled. But, if they don't agree, then you still have to pay the bigger amount that you owe them.

It's important to remember that debt settlement can be tricky and you should always talk to a grown-up about it before you try to settle your own debts. They will explain everything to you in more detail and help you figure out the best way to pay back your debts.