Debt settlement letter

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Debt Settlement Letter

When you find yourself in debt you may have difficulty in writing a debt setlement letter that clearly states your proposals in settling the debt. The debt settlement letter has to include your reasonable solution to the problems you and your creditors face. You need to be realistic in what you are proposing. If it is to have any chance of acceptance it must offer terms that are reasonable for the creditor. A debt settlement letter has three main sections

  • It states your current situation, explaining why the debt crisis has arisen and what your capabilities are in repaying the debt.
  • The debt settlement letter will then list your proposals for clearing the debt. This could be a restructuring of the payment process for the full debt or a proposal to pay a portion of the debt as settlement.
  • You then need to state clearly what your expectations are if the agreement is accepted. The agreement must clear the debt and all your responsibilities in paying it.

The folowing sample debt settlement letter specifies the overall structure a letter might take. Some elements are common to all such letters, and can be altered to suit your needs.

Sample Debt Settlement Letter

Mr Jim Smith
26 High Street
New Town
Myland
ABC123D

Phone 0123 123456
Email me@mysite.com

The Standard Service Supply Company
Service Headquarters
Service Road
Servicetown

25th April 2012

Dear Sirs

With reference to [State current agreement schedule or ID]

I must unfortunately advise you that due to unforseen circumstances I am now unable to continue making payments according to our current agreement. [Explain new circumstances]

It is in both our interests that the outstanding debt is dealt with efficiently and completely. I have therefore prepared the following set of proposals that will will provide a realistic mechanism for clearing the debt. [State proposals]

It is a condition of these proposals that if they are acceptable to you they will represent full and final settlement of the debt, and my credit rating will not be adversely affected by this debt and changes to its repayment plan.

I thank you for your consideration of my proposals and look forward to hearing from you at your earliest convenience.

Yours sincerely

Jim Smith

 

- End of sample debt settlement letter -

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