Debt settlement involves convincing a creditor to accept less than the creditor is currently owed.  As you can imagine, this is not an easy process.  When handled by an attorney who files bankruptcy cases, though, debt settlement can be accomplished.  

It is important to understand the profound negatives of debt settlement.  Yes, settlement may be the correct option, but most people are unaware of the negatives, which include:

(1) a severe credit hit,

(2) an out-of-pocket cost that may exceed anything paid to file bankruptcy, and

(3) a potential tax hit when the lender sends a 1099-C.

In contrast, a typical bankruptcy 

(1) is no worse on credit than a settlement,

(2) costs far less than a settlement, and 

(3) avoids the tax hit created by debt settlement.