system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How do credit settlement companies who claim that people who have a lot of debt don't have to pay it back work?

I was driving home today and on the radio I hear an advertisement from a company that guarantees that if you have a huge amount of credit card debt, that you don't have to pay it back. They claim that you only have to pay a small fraction back. How the heck does that work? Borrow a ton of money and only pay a small fraction back? I don't understand how that would work. Thanks for any replies!

**EDIT - 4/2/18** - WOW! This really blew up fast! Thanks for all the replies, the big lesson that I learned from this is NOT to get into debt that I can't pay back! Thanks everyone!
gpt
Broke people can't pay their bills. It's just math.

So let's say you owe your credit card companies $25,623 and you don't really have any way of paying that back. You might file bankruptcy, and the credit card companies would get little or nothing. OR they could agree to take $5,000 and just give up on the rest. This is probably a better option than forcing you into bankruptcy, because $5,000 > $0. 

So these companies work with your credit card companies and other creditors to arrange a settlement. It usually looks like them paying $5,000 to the credit card company to wipe out the debt, and then you end up paying them $6,000 over time, so they make money too.