At peace, having discharged a debt (7)

I believe the answer is:

settled

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'discharged a debt' is the definition.
'settled' can be an answer for 'discharged' (thesaurus). I'm not sure about the 'a debt' bit.

I cannot understand how the rest of the clue works.

Can you help me to learn more?

(Other definitions for settled that I've seen before include "Colonised; decided" , "Resolved; calm" , "Sank or came to rest" , "Resolved (an argument)" , "no longer an issue" .)

I've seen this clue in The Irish News.

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