4. Debt Settlement and Bankruptcy Options

In situations where a debtor is unable to repay the debt fully, debt settlement and bankruptcy are potential options:

a. Debt Settlement: Debtors and creditors can negotiate a settlement wherein the debtor pays a reduced amount to satisfy the debt.

b. Bankruptcy: Bankruptcy is a legal process where debtors can seek relief from overwhelming debts, either by liquidating assets or creating a repayment plan.