diff --git a/htlcswitch/packet.go b/htlcswitch/packet.go
index e991858519..ed5f82588c 100644
--- a/htlcswitch/packet.go
+++ b/htlcswitch/packet.go
@@ -1,6 +1,8 @@
 package htlcswitch
 
 import (
+	"fmt"
+
 	"github.com/lightningnetwork/lnd/channeldb"
 	"github.com/lightningnetwork/lnd/graph/db/models"
 	"github.com/lightningnetwork/lnd/htlcswitch/hop"
@@ -136,3 +138,12 @@ func (p *htlcPacket) keystone() Keystone {
 		OutKey: p.outKey(),
 	}
 }
+
+// String returns a human-readable description of the packet.
+func (p *htlcPacket) String() string {
+	return fmt.Sprintf("keystone=%v, sourceRef=%v, destRef=%v, "+
+		"incomingAmount=%v, amount=%v, localFailure=%v, hasSource=%v "+
+		"isResolution=%v", p.keystone(), p.sourceRef, p.destRef,
+		p.incomingAmount, p.amount, p.localFailure, p.hasSource,
+		p.isResolution)
+}
diff --git a/htlcswitch/switch.go b/htlcswitch/switch.go
index 4c54fab0a5..704887e8e1 100644
--- a/htlcswitch/switch.go
+++ b/htlcswitch/switch.go
@@ -2994,6 +2994,15 @@ func (s *Switch) handlePacketSettle(packet *htlcPacket) error {
 	// If the source of this packet has not been set, use the circuit map
 	// to lookup the origin.
 	circuit, err := s.closeCircuit(packet)
+
+	// If the circuit is in the process of closing, we will return a nil as
+	// there's another packet handling undergoing.
+	if errors.Is(err, ErrCircuitClosing) {
+		log.Debugf("Circuit is closing for packet=%v", packet)
+		return nil
+	}
+
+	// Exit early if there's another error.
 	if err != nil {
 		return err
 	}
@@ -3005,7 +3014,7 @@ func (s *Switch) handlePacketSettle(packet *htlcPacket) error {
 	// and when `UpdateFulfillHTLC` is received. After which `RevokeAndAck`
 	// is received, which invokes `processRemoteSettleFails` in its link.
 	if circuit == nil {
-		log.Debugf("Found nil circuit: packet=%v", spew.Sdump(packet))
+		log.Debugf("Circuit already closed for packet=%v", packet)
 		return nil
 	}