Mary J. Blige -- Knocks $200k Off Massive Bank Debt

It pays to be broke ass broke if you're Mary J. Blige's foundation -- a bank just agreed to slash the group's debt by nearly $200,000 ... TMZ has learned.

According to legal docs, TD Bank reached a settlement with Mary J.'s charitable group ... agreeing to let it pay a mere $125k -- which might not sound like a great deal, until you realize the total tab was a whopping $322,000!

As TMZ first reported ... the Mary J. Blige and Steve Stoute Foundation for the Advancement of Women Now was sued last year when it defaulted on a $250k loan. The charity even blamed the bank ... claiming it should've know the group's finances were in shambles.

According to the settlement, the group will pay back $15,000 immediately -- and then make 12 easy payments of $9,166.