I’ve listed several within the parentheses, but feel free to include whatever situation may be preventing you from making full payment. It should be a circumstance beyond your control. In the last sentence, you should provide a reason why you won’t be able to pay the full amount. This revelation may convince the creditor that settling the debt is in their best interest. ![]() In the next sentence, you’ll explain why you can’t pay the full amount. Your opening paragraph should quickly state the purpose of your letter, which is a proposal to settle the account for less than the full amount. Let’s look at each paragraph individually to explain what it should convey and why it’s necessary. Anything more is unnecessary and could be misinterpreted. It should spell out the main points of your proposal. The body of your letter should be brief, two or three paragraphs at most. Account numbers listed on credit reports are sometimes scrambled, which makes them invalid. ⚠️ The account number you’ll include on the reference line should be the one provided directly by the creditor. This must be included so the creditor will know exactly which debt you’re proposing to settle. The “reference” line should include the relevant account number. ![]() If there’s no specific individual, make a phone call and get the name of a person likely to be in a capacity to work with your proposal. You should send a letter to the person you’ve been dealing with at the company. If that happens, your proposal will never be read, let alone acted upon. In a very large organization, correspondence not directed to a specific individual can easily end up in the dead letter file. If you simply address the letter to the company, it may never find its way to an individual who will act on your proposal. Notice that the name of a contact person in the organization is included in the creditor’s address? This is a critical point. If you visit your PO Box only infrequently, you may miss a deadline included in the creditor’s letter of acceptance. Using a post office box is not recommended, since time may be of the essence. Your AddressĪs the sample letter shows, you’ll enter your name, home address, and phone number at the top. Though the address section may seem like more of a formality than anything else, it includes information critical to a debt settlement proposal. Now that you have a basic idea of what a debt settlement letter looks like, we can get into the details of each section, and why you need to convey the specific information shown. Your letter will be less effective if our instructions are still visible! What’s in a Debt Settlement Letter? These instructions are indicated by _ text.īe sure that you fill in all required information and delete the _ text before you send the letter. You will see instructions for the information that you will need to insert. This template must be customized to fit your circumstances. ⚠️ Please Read Before Using This Template! ⏬ Debt settlement letter template for Google Docs ⏬ Debt settlement letter template for Microsoft Word Debtor Download debt settlement letter templates: Upon receipt of your letter of acceptance, I will immediately forward payment for the agreed-upon amount.ĭaniel D. If you agree to this arrangement, please prepare and mail a letter of acceptance to me. Please accept this amount in full satisfaction of the entire balance, and report the account as paid with each of the three major credit bureaus, Experian, Equifax and TransUnion. I understand the importance of settling my obligations, and I propose to settle the debt for $XXX. It is not possible for me to pay the full debt, due to my recent (job loss, medical event, divorce, business failure, death of a loved one, etc.). In regard to the above-referenced debt, I wish to propose settling the account for a reduced amount. Review the sample letter, then we’ll break it down with some items to consider for each section. ![]() Customize it to fit your individual circumstances. You can use the sample debt letter below as a template for your own debt settlement effort. ![]() Let’s look at example of the type of letter you’ll need to send to start the process. You’ll use the letter to propose settling the debt for a reduced amount. If you decide to try to settle your debts, you’ll start the process by writing a debt settlement letter. Before you contact a creditor, consider the advantages and disadvantages of debt settlement. If you have debts that you truly cannot pay, debt settlement may be an option. When you purchase through referral links on our site, we earn a commission.
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