If creditors have the right to seize property or pursue legal action against borrowers who fail to pay their debts, you may be wondering why they would ever agree to settle borrowers’ debts for less than the full amount they are owed. The reason is simple. As a borrower, if you can’t afford to make payments on your debt, your creditor is losing out on money anyway and may see a settlement as a way to collect at least partial payment on the debt without incurring the expense of a debt collection lawsuit.