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How to Settle a Debt in Pennsylvania

Dena Standley | December 16, 2022

When you reach a debt settlement agreement in Pennsylvania ^^

Summary: Settling a pressing debt can relieve stress and sleepless nights caused by debt collectors’ aggressive attempts to collect their money. To settle a debt in Pennsylvania, you must respond to any debt lawsuits against you, send an initial offer to start negotiations, and get the agreement in writing. SoloSuit has the expertise and services to help you get a favorable debt settlement deal in Pennsylvania.

Is debt the root cause of all your troubles at the moment? How do you find relief from the most pressing debt or the most aggressive creditor? Debt settlement can be the method to use to help you clear a debt that creditors are persistently pursuing.

Debt settlement in Pennsylvania involves offering to pay a creditor or debt collector collector a lump sum percentage of the outstanding debt. There is a good chance you’ll be able to settle for anywhere between 50%-85% of the original debt amount.

Keep reading to learn how to settle a debt in Pennsylvania and including other helpful information to ease the burdens of debt and move on with your life.

Three steps to settle a debt in Pennsylvania

Sometimes consumers skip making payments due to other pressing matters. The creditor often doesn’t understand these situations 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. In such situations, debt settlement can help you avoid this outcome.

Follow these steps to settle a debt after being sued in Pennsylvania:

  1. Respond to the debt lawsuit with an Answer.
  2. Send a debt settlement offer to start negotiations.
  3. Get the settlement agreement in writing.

Below, we’ll take a closer look at each of these steps. Alternatively, you can watch this video to learn more:

1. 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. Failure to respond may result in a default judgment in favor of the plaintiff. The same principle applies to debt collection cases. You must first send an Answer before making a debt settlement offer.

In Pennsylvania, you have 20 days to respond to a debt lawsuit before you lose automatically when the court orders a default judgment. When you respond to the lawsuit before the deadline, you give yourself time to work out a debt settlement.

You'll find a Complaint document in the lawsuit that lists the creditor's allegations against you. You can respond in three ways; admit, deny, or deny for lack of knowledge. Notably, most attorneys recommend denying as many allegations as possible..

Next, you must give your affirmative defenses. These defenses are essentially a list of reasons that you should not be held liable for the debt. Affirmative defenses can help your case if the creditor rejects the settlement offer and you must appear in court. SoloSuit's customizable Answer form can help you find the ideal defenses to use.

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2. Send a debt settlement offer to start negotiations

Once you've confirmed the Answer is in the case records, you must decide if you want to hire a debt settlement company or use the do-it-yourself approach. Whichever method you choose, consider the following factors:

  • Determine how much you can afford to offer:Have you already saved some cash for settlement? If so, is the creditor likely to accept it? If you do not have funds already saved, you need to cut back on your expenses and save a small portion of your income until you’ve saved enough to offer considerable lump sum.

  • Calculate how much the creditor is likely to accept: Most creditors accept between 60–80% of the original amount, while a collection agency that has bought the debt may take less than that. A debt settlement company that works with these creditors can give you a clearer picture once you hire them.

On average, consumers can settle a debt for 50% the original amount when working with a debt settlement company. However, keep in mind that you will have to pay up to 25% of the debt amount in fees to the agency that helps you settle.

As another option, you can negotiate your own debt settlement with the help of SoloSettle.

3. Get the settlement agreement in writing

If a creditor or debt collectors refuses to sign a settlement agreement, you should suspect they want to deceive you. A debt settlement agreement prevents the opposing party from going back on its word and asking you to pay the balance to either remove the debt on your credit report or withdraw the case.

Use the following debt settlement agreement example as a guide.

SoloSettle Debt Settlement Agreement

SoloSettle is the easiest way to settle your debt

SoloSettle enables consumers to negotiate for debt settlement and reach a reasonable deal. The web app provides a structured process that allows you to send and receive offers from debt collectors. It drafts the offers and protects you from the deceptions creditors and collectors may use to get more money from you.

Solosettle uses professional legal language that protects your rights when communicating with creditors. When you reach a settlement deal, SoloSettle also sends the settlement payment on your behalf so you can keep your financial information private and secure. It will also help you manage the debt settlement agreement.

Let's look at an example:

Example: Lydia had accrued $6,900 in debt from Versatile Credit Inc. The company sued her, and she responded immediately with an Answer. Next, Lydia used SoloSettle to start the settlement process. The debt settlement experts recommended she make an offer of 40% ($2,760), aiming not to pay more than 70% of the original amount. After several negotiations, Versatile Credit accepted $4,480 (65%).

Pennsylvania debt settlement laws can protect you

Pennsylvania uses debt settlement laws to ensure consumers are not harassed and taken advantage of while seeking to settle their debt. These guidelines (Pa. Stat. tit. 10, §57) state that debt settlement companies should:

  • Openly state the services they will provide and at what cost
  • Avoid making unreasonable promises on settling a debt
  • Not charge high fees for services offered
  • Provide written documents for the settlement agreement
  • Have an updated practicing license

If a debt settlement company violates these guidelines, report them to the Pennsylvania attorney general's office. You can also submit a complaint on the Fair Trade Commission website.

Additionally, the Federal Trade Commission has recently amended the Telemarketing Sales Rule to expand debt settlement regulations to all debt relief organizations and companies. All 50 states, including Alabama, are governed by this Rule as it relates to debt settlement practice.

Under the new Rule, any company that provides debt relief services, namely debt settlement companies, cannot:

  • Charge upfront fees. Debt settlement companies cannot collect any fees from a consumer before the debt has been effectively settled or otherwise resolved.

  • Fail to disclose certain information about its services before a consumer enrolls in the 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’s rights, and other important terms.

  • Misrepresent their services. No false or unsubstantiated claims can be made regarding a debt settlement company’s services.

What’s the best debt settlement company?

Consumers sometimes fail to reap the benefits of receiving a reasonable settlement deal because they fear working with debt settlement companies. While the fears are legitimate, there are genuine debt settlement companies that desire to help consumers get out of debt. Here are four you can consider working with:

  • SoloSettle: This company works with a debt of any amount, unlike other companies that require you to have a debt of $15,000 and above. SoloSuit is also a legitimate company trusted by many, and it has built-in legal defenses to protect you during the settlement process.

  • American Credit Card Solutions: This company offers various debt solutions, including debt settlement. You begin by working with experts to assess your debt situation.

  • Cura Debt: The specialists help you make sense of your debt and plan your way to freedom.

  • This trusted non-profit organization helps consumers get out of debt without resorting to bankruptcy.

Check out this review from a real SoloSettle customer:

“I'm very thankful for SoloSettle.. Having a third party negotiate the settlement was instrumental in resolving this case and saved me from two giant headaches: 1) I didn't have to deal with the plaintiff's lawyer and 2) I didn't have to go to court. I also love that the payment was processed through SoloSettle. I was nervous about sharing my personal financial data with the other side, but SoloSettle protected that for me. I hope I never get sued again, but if I do, I would use SoloSettle again in a heartbeat.

SoloSettle really saved me a ton of time and heartburn and kept me from having to be my own lawyer in court.”

Now, you be the judge of who offers the best debt settlement services.

Choose the best method to contact the debt collector

Debt collectors can be challenging to speak with because they want you to promise to pay their money sooner than later. Fortunately, your communication this time won't be unpleasant because you will be offering them money. You can use the following methods to contact the debt collector for a settlement offer:

  • Phone: Negotiating for settlement over the phone is unreliable because there is no proof of the settlement deal unless you record it. Unfortunately, you cannot record a phone conversation without the consent of the other person in Pennsylvania (18 PA Cons Stat § 5703 and 5704).

  • Mail: This method ensures you get a paper trail of the settlement process. The negotiations take time due to the days between receiving and sending the letter. Certified mail is the best service to use as it confirms delivery.

  • Email: This method is ideal because sending and receiving a response is straightforward. Additionally, it's instantaneous if you have the correct email address, and you can trace any information within seconds.

The contact details of the creditor or collection agency will be in the lawsuit letter. If not, call the company and ask for contacts for the right person to negotiate a settlement deal.

How to get debt relief in Pennsylvania

Other debt relief options are available if debt settlement is not the best debt management option for you. You can explore debt consolidation (combining debts into one by taking a loan with a better interest rate) and bankruptcy (used when liabilities greatly exceed your assets). Read the following guide on How to Get Debt Relief in Pennsylvania to learn more about these options and organizations that can help.

SoloSuit can help you settle your debt

Our team is committed to helping you find a solution to your debt challenges. We have created several products that assist consumers in talking to debt collectors at any point in the collection process. SoloSettle, which is powered by SoloSuit, is superior because it allows you to have a back-and-forth conversation with the creditor within the app, providing a provable trail of written communication. Start working on your debt settlement deal with us today.

Pennsylvania debt settlement FAQs

Is it better to settle a debt in Pennsylvania or file for bankruptcy?

It depends on your current financial situation. If you have a source of income you can spare, then debt settlement can be the option you need. Consider bankruptcy if your assets are less than your liabilities and your income barely meets your necessities.

Can a creditor garnish your wages in Pennsylvania?

Yes, a creditor can garnish your wages if they win a debt collection case against a debtor. The court gives the creditor permission if they prove you have ignored their attempts to collect and you have an income stream. Trying to settle with the creditor before the court date can save you from this outcome.

How do I respond to a settlement offer from a creditor?

First, establish if you have the money to pay the settlement, then make a significantly lower counteroffer than what they offered. They will counter the offer, and you can increase it by a small margin. By this time, they are likely to accept the offer. Ensure you have the settlement agreement in writing.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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