Debt settlement occurs when someone that is collecting debt reduces the amount that has been assigned to be paid to a smaller amount. Many times consolidators will allow this to happen if those that are in debt start to continually pay off their debt month by month and do not stop. Somewhat as a reward, you can say. Sometimes, in order to arrange a settlement that is not being offered to you, one can get into contact with a lawyer and they can try to negotiate a debt settlement for them. The amount of money that is usually reduced is about 20% off of the total that they owe. Even though your debt is not rid of completely, it's a better situation then what you were in before.