First off, the KJV isn't a very good translation of the words used, but regardless of how good or not the translation actually is, using the words "debt" and "debtors" can be considered a reference to the Old Testament practice of the Jubilee, where land was to return to its original owners and debts were to be forgiven.
As to the wolf/lion and the lamb, it's referencing a point in the future (the fulfillment of Heaven) when creatures that are normally at war or violent to each other won't be any longer.