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Today's high prices probably aren't going away — and neither is the debt that many people have accrued because of them. Even  compared to last year, the cost of essentials like housing, groceries and insurance remains stubbornly high. For many Americans, that's translated into stretched budgets, along with , more personal loans and a growing sense of financial anxiety.

At the same time, interest rates on borrowing products, like loans and credit cards, are still elevated, which makes it harder to dig out once you've fallen behind. For example, the   is closing in on 22% right now, and many cardholders are stuck with much higher rates. And, with  across multiple types of consumer debt, more borrowers are starting to ask the hard question: What do I do if I just can't afford to pay it all back?

One potential answer is , which is a strategy that allows you to negotiate with your creditors to pay less than what you owe. But while it can offer relief, it also comes with serious trade-offs, so it's important to know what you're getting into before you enroll.

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Here's a closer look at how debt settlement works, when it makes sense and what to consider before going down this path.

Debt settlement is a process where you  to pay less than the full amount you owe. It typically applies to unsecured debts — like credit cards,  or personal loans — and is often used as a last resort when a borrower can't afford to pay off their debt in full.

Unlike , which combines your debts into one manageable loan, debt settlement is focused on reducing your balances outright. The goal is to settle for a lump-sum payment that's less than what you owe, often by working with a professional .

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The typical debt settlement process takes a few years and :

The entire process typically , depending on how much debt you have and how much you're able to save.

Debt settlement is people who:

That said, debt settlement is generally not a good fit if you have mostly secured debts like a mortgage or auto loan, or if you're keeping up with your payments and just looking for a more affordable solution. In those cases,  or consolidation may be a better route.

Debt settlement can offer real advantages — especially for borrowers who have exhausted other options. Here are some of the key benefits:

Just remember that these benefits only apply when the process goes well and you stay committed to your program by making deposits into your dedicated account.

Debt settlement can offer significant savings, but it's not without its downsides, which include:

Still, for people overwhelmed by debt and without other realistic options, these risks may be worth it for the chance to resolve what they owe and start fresh.

Debt settlement isn't a quick fix or a perfect solution, but for some borrowers, it can be a way to avoid bankruptcy and dig out of overwhelming debt. If you're considering debt settlement, though, you should also be sure to weigh your other options first, like credit counseling or even negotiating directly with creditors. And, if you do decide to go this route, it's important to work with a reputable company, stay informed and make sure the potential benefits outweigh the trade-offs.