Saying a pressing debt can reduce stress and sleepless nights caused by debt collectors’ aggressive efforts to collect their debts. If you wish to pay a debt in Pennsylvania, you must respond to any lawsuits filed against you, submit an initial offer to begin negotiations, and obtain a written agreement.
How can you find relief from the most pressing debts or the most aggressive creditors? Debt settlement may be the method to use if creditors are persistently pursuing your debt.
In Pennsylvania, debt settlement involves paying a creditor or debt collector a lump sum percentage of the outstanding debt. You can settle for between 50% and 85%.
Read on to learn how to settle a debt in Pennsylvania and other helpful information to help relieve the debt burden and move forward with your life.
Pennsylvania debt settlement steps

It is common for consumers to skip payments due to other pressing matters. The creditor is only sometimes aware of these circumstances and uses various methods to force them to pay. If all else fails, they may sue you to force you to pay the remaining balance on the account, plus legal fees. You can avoid this outcome through debt settlement in such circumstances.
To settle a debt after being sued in Pennsylvania, follow these steps:
- Provide an Answer to the debt lawsuit.
- Start the negotiation process by sending a debt settlement offer.
- Make sure that the settlement agreement is in writing.
Each of these steps will be discussed in more detail below.
1. You need to respond to the debt lawsuit with an answer
In Pennsylvania, every person (defendant) who receives a lawsuit Summons and Complaint must respond with an Answer. The same principle applies to debt collection cases, where a failure to respond may result in a default judgment in favor of the plaintiff. A debt settlement offer must be submitted first after an Answer has been sent.
In Pennsylvania, you have 20 days to respond to a debt lawsuit before the court orders a default judgment. When you respond before the deadline, you can negotiate a settlement.
There will be a Complaint document in the lawsuit which lists the creditor’s allegations against you. You may respond in three ways; admit, deny, or deny without knowledge. Most attorneys recommend denying as many allegations as possible.
As a next step, you must provide your affirmative defenses, which are important reasons why you should not be held responsible for the debt. These defenses can help you if the creditor rejects the settlement offer and you must appear in court.
2. To begin negotiations, send a debt settlement offer
As soon as you have confirmed that the Answer is in the case records, you must decide whether you wish to hire a debt settlement company or engage in the do-it-yourself approach.
- Do you have some cash already saved for settlement? If so, is the creditor likely to accept your offer? Determine how much you can afford to offer. You must reduce your expenses and save a small portion of your income until you can provide a considerable lump sum if you do not have sufficient funds held.
- If a collection agency has purchased the debt, it may take less than the original amount. Consider how much the creditor will accept: Most creditors get between 60–80% of the actual amount. Once you hire a debt settlement company that works with these creditors, you will be able to gain a better understanding of your situation.
It is estimated that consumers can settle a debt for 50% less than the original amount by working with a debt settlement company. However, you will need to pay up to 25% of the debt amount in fees.
3. Obtain a written settlement agreement
Creditors or debt collectors who refuse to sign settlement agreements will likely deceive you. In a debt settlement agreement, the opposing party cannot return on its word and ask you to pay a balance to remove the debt from your credit report or withdraw the case.
Pennsylvania’s debt settlement laws protect you
Debt settlement laws in Pennsylvania protect consumers from harassment and abuse while seeking to settle their debts. According to these laws, settlement firms must:
- Clearly state what services they will provide and at what cost
- Do not make unreasonable promises regarding the settlement of a debt
- Services should not be charged at a high rate
- Prepare the settlement agreement in writing
- Maintain an updated license to practice
Notify the Pennsylvania attorney general’s office if a debt settlement company violates these guidelines. You may also file a complaint with the Federal Trade Commission.
A recent amendment to the Telemarketing Sales Rule by the Federal Trade Commission has also expanded debt settlement regulations to include all debt relief organizations and companies. As far as debt settlement practice is concerned, this Rule applies to all 50 states, including Alabama.
Companies that provide debt relief services, such as debt settlement companies, are prohibited from:
- Companies that settle debts cannot charge consumers upfront fees before the debt has been effectively settled or otherwise resolved.
- Defendants that fail to disclose certain information about their services to consumers before enrolling in a program. This includes how much the service costs, how long it takes to see results, how much money must be saved before a settlement offer is made, consequences that may occur if the consumer fails to make payments on time, customer rights, and other essential terms.
- It is not permissible for a debt settlement company to make false or unsubstantiated claims about its services.
How do I choose the best debt settlement company?

The fear of working with debt settlement companies often prevents consumers from reaping the benefits of a reasonable settlement deal. There are reputable debt settlement companies that wish to help consumers get out of debt. Here are four companies that you should consider working with:
- American Credit Card Solutions: Debt settlement is one of the debt solutions offered by this company. The process begins with an assessment of your debt situation by experts.
- Cura Debt: With the assistance of specialists, you will be able to make sense of your debt and plan your way to freedom.
- Credit.org: In this non-profit organization, consumers can get out of debt without bankruptcy.
Contact the debt collector in the most effective way
Often, debt collectors find it difficult to communicate with you because they want you to promise to pay them as soon as possible. Fortunately, this time around, your communication will be pleasant since you are offering money to them. If you wish to contact the debt collector regarding a settlement offer, you may use the following methods:
- A settlement over the phone is unreliable because verifying the settlement requires recording it. In Pennsylvania (18 PA Cons Stat 5703 and 5704), you cannot record a phone conversation without the other party’s consent.
- Certified mail ensures that you have a paper trail of the settlement process. Negotiations often take time because of the delay between receiving and sending the letter. Certified mail is the most reliable service as it confirms delivery.
- Sending and receiving emails is straightforward; it is instantaneous if you have the correct email address and can track the information within seconds.
In most cases, the contact information for the creditor or collection agency will be included in the lawsuit letter. If not, contact the company and ask for the contact information of the proper individual to negotiate the settlement.
The best way to get Pennsylvania debt relief

Suppose there are better options than debt settlement for you. Consider debt consolidation (combining your debts into one by taking out a loan with a lower interest rate) or bankruptcy (used when your liabilities exceed your assets).
FAQs
Can a Pennsylvania debt be settled, or is bankruptcy better?
Depending on your current financial situation, debt settlement may be an option. Consider bankruptcy if your assets are less than your liabilities and your income barely meets your basic needs.
In Pennsylvania, can a creditor garnish your wages?
You may be garnished if a creditor wins a debt collection case against a debtor. If the creditor proves that you have ignored their efforts to collect and you have an income stream, the court permits the creditor to garnish your wages. You can avoid this outcome by resolving the dispute before the court date.
What should I do if a creditor offers me a settlement?
If you can afford the settlement, you can make a significantly lower counteroffer than they offered. As soon as they counter your offer, you can raise it by a small margin. By this time, the request is likely to be accepted by them. Having the settlement agreement in writing is extremely important.