Debt settlement, also known as debt arbitration, debt negotiation or credit settlement, is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. In the U.K. you can appoint an Arbiter or legal entity to negotiate with the creditors. Creditors often accept reduced balances in a final payment and this is called full and final settlement but with debt settlement the reduced amount can be spread over an agreed term.