it's called damping-off.

it's a bacteria in the soil that affects seedlings in their most crucial stage. you can get stuff to prevent it, but i'm not sure how recoverable that seedling is.

when you plant plants into pots.. always wash the pots out thoroughly to kill any pre exsisting bacteria


Try burying the stem in soil up to the first set of leaves, and re-pot into a bigger pot.. you could possible save her