Debt Settlement Agency in Philadelphia
The experienced debt settlement specialists at Cibik Law are here to help people all across Pennsylvania and New Jersey take control of their credit card debt, late car payments & past due mortgages so that they can move toward a more financially secure future.
Calls from creditors and debt collectors can make a person feel like their options are limited and the weight of carrying this stress alone can create a moment of feeling “stuck”. The hopeless feeling of debt can make a person feel like there is no end in sight. You can contact a “debt settlement company” to try and negotiate with your creditors OR you contact a real attorney, who can use all the tools available, afforded to individuals by the US Federal Bankruptcy Laws, to help you get the best settlement terms available.
Steps a person should take before seeking additional debt relief options.
First, try to contact your creditors and come to an agreement for a payment plan to bring your account back in good standing and before any collection efforts.
If you already tried to reach out to your creditors and could not come to an agreement, or your debt is too overwhelming to handle, there is another option. Bankruptcy. We know there can be a negative connotation , but the reality is that for some people, a Chapter 7 or Chapter 13, could be their best option for ridding themselves of their current debt and moving forward in life with a clean slate.
At Cibik Law, we will go above and beyond to ensure every avenue has been exhausted before we recommend the best solutions to settle your debts. Stop the harassing collection calls, cease any legal actions against you or your property and build a plan together, to start rebuilding your finances, your credit and your financial freedom. Most importantly is clearing your mind and body of the stress that comes with having debt.
BE AWARE: when researching the area of debt settlement companies, you may find many who offer “the perfect solution” to get you more money today and consolidate your debts into one monthly payment. I always recommend all of my clients first ensure the efficacy of any debt solution offered to them and taking on more debt is generally NEVER the right option for most.
To ensure you are working with with a Pennsylvania State Certified Debt Settlement Agency under the Certified PA Bankruptcy Court.
How Debt Settlement Works in Pennsylvania
Debt settlement is a process where a qualified attorney negotiates directly with your creditors to reduce the total amount you owe. Unlike debt consolidation, which rolls multiple payments into one loan, settlement aims to lower your actual balance. In Pennsylvania, this process is governed by both federal regulations under the Federal Trade Commission and state-level consumer protection laws enforced by the Pennsylvania Attorney General’s Office.
At Cibik Law, our debt settlement attorneys leverage decades of bankruptcy court experience to negotiate from a position of strength. Creditors understand that when a board-certified bankruptcy attorney contacts them on your behalf, the alternative to settling may be a bankruptcy filing where they recover even less. This gives our clients a significant advantage over using a non-attorney debt settlement company.
What types of debt can be settled in Pennsylvania?
Most unsecured debts are eligible for settlement negotiations in Pennsylvania. This includes credit card balances, medical bills, personal loans, private student loans (in some cases), and past-due utility bills. Secured debts such as mortgages and auto loans require different strategies since the creditor holds collateral. Our attorneys at Cibik Law evaluate each client’s full financial picture during the free consultation to determine which debts are best candidates for settlement versus other relief options like Chapter 7 or Chapter 13 bankruptcy.
How long does the debt settlement process take?
The timeline for debt settlement varies depending on the number of creditors involved, the total amount of debt, and your ability to accumulate funds for lump-sum settlement offers. Most debt settlement programs in Pennsylvania take between 12 and 48 months to complete. Working with an attorney can often accelerate this timeline because creditors are more willing to negotiate quickly when they know a bankruptcy filing is a realistic alternative. Cibik Law has successfully negotiated settlements that reduced client balances by 40 to 60 percent in many cases.
What is the difference between debt settlement and bankruptcy?
Debt settlement and bankruptcy are both legitimate debt relief strategies, but they work differently. Debt settlement involves negotiating reduced balances with individual creditors and typically does not provide the same legal protections as bankruptcy. When you file for bankruptcy under Chapter 7, an automatic stay immediately stops all creditor harassment, lawsuits, wage garnishments, and collection calls. Chapter 13 allows you to reorganize debts into a manageable payment plan over three to five years. Debt settlement does not trigger an automatic stay, meaning creditors can continue collection activities during negotiations. However, settlement may be preferable for individuals who want to avoid a bankruptcy filing on their credit report or who have a smaller number of accounts to resolve.
Will debt settlement affect my credit score?
Debt settlement will typically have a negative impact on your credit score in the short term. Settled accounts are reported to credit bureaus as “settled for less than the full amount,” which creditors view less favorably than accounts paid in full. However, for individuals who are already behind on payments or facing collection actions, the credit impact of settlement is often less severe than continuing to miss payments. Many clients see their credit scores begin to recover within 12 to 24 months after completing a settlement program, especially when combined with responsible credit rebuilding strategies that our attorneys can recommend.
Are there tax consequences to settling debt in Pennsylvania?
Yes, the IRS may consider forgiven debt as taxable income. If a creditor forgives more than $600, they are required to issue a 1099-C form reporting the cancelled debt. However, there are important exceptions. If you were insolvent at the time of the settlement, meaning your total debts exceeded your total assets, you may be able to exclude the forgiven amount from your taxable income by filing IRS Form 982. Pennsylvania does not impose a separate state income tax on forgiven debt beyond the federal requirements. Our attorneys advise every client about potential tax implications before finalizing any settlement agreement.
Why hire a bankruptcy attorney for debt settlement instead of a debt settlement company?
Debt settlement companies are not licensed to practice law and cannot represent you in court if a creditor files a lawsuit. In Pennsylvania, many non-attorney settlement companies charge upfront fees before settling any debts, a practice that is prohibited under FTC rules for companies that use telemarketing. A bankruptcy attorney like those at Cibik Law can negotiate settlements while also providing legal protection if any creditor escalates to litigation. Additionally, having an attorney review your entire financial situation ensures you are choosing the best debt relief strategy overall, whether that is settlement, Chapter 7, Chapter 13, or a combination approach.
Can creditors sue me while I am in a debt settlement program?
Yes, creditors retain the legal right to file lawsuits during the debt settlement process. Unlike bankruptcy, debt settlement does not provide an automatic stay against legal action. If a creditor files a lawsuit in the Philadelphia Court of Common Pleas or a Pennsylvania magistrate court, you need legal representation to respond. This is one of the most important reasons to work with a debt settlement attorney rather than a non-attorney company. At Cibik Law, if a creditor files suit against one of our clients during negotiations, we can immediately respond, negotiate from a legal position, or pivot to a bankruptcy filing if that provides better protection. Many of our clients in Philadelphia and Montgomery County have avoided judgments and wage garnishments because they had an attorney managing their case from the start.
How much does debt settlement cost at Cibik Law?
Cibik Law offers a free initial consultation to evaluate whether debt settlement is the right strategy for your situation. Our fees are structured based on the complexity of your case and the number of creditors involved. Unlike many debt settlement companies that charge a percentage of your total enrolled debt upfront, we work transparently with our clients to ensure they understand all costs before committing to a program. Call 215-774-3916 today to schedule your free, no-obligation consultation with a board-certified bankruptcy specialist who can help you explore every available option for debt relief in Pennsylvania.
Philadelphia Debt Settlement: Areas We Serve
Cibik Law provides debt settlement services from our offices in Center City Philadelphia and King of Prussia. We represent clients throughout the greater Philadelphia metropolitan area including Northeast Philadelphia, Bala Cynwyd, Norristown, Conshohocken, Abington, Cheltenham, and communities across Montgomery County, Bucks County, Delaware County, and Chester County. Our firm is also licensed to represent clients in New Jersey. Whether you are dealing with overwhelming credit card debt, medical bills, or collection lawsuits, contact us at 215-774-3916 to schedule your free consultation with a board-certified bankruptcy specialist.
