The right debt settlement letter can help an individual secure an amazing deal with one of their lenders. However, these letters need to be approached in the right manner. The right wording and information can help a person negotiate his or her way out of some serious debt. Having all of this in writing is important so that there is a paper trail that protects each party. This is where composing such a letter comes into play. The following includes some tips for how to craft an effective debt settlement letter that will get lenders to sit up and listen.
First, it is very important to have all of the right information included in such a letter. This means including one’s name, address, the date of the letter, the collector or lender’s name and address, and the account number. If possible, it is important to address the letter to a specific customer representative, specifically a staff member that has spoken to the letter writer.
The first paragraph should be short and should explain the purpose of the letter. An example includes: Hello, my name is [Insert Name] and I am writing to settle the outstanding debt with [Name of Creditor]. Recently, I have fallen behind on payments because [Insert Reasons]. However, despite this, I am committed to paying back this debt.
The second paragraph should talk about the specific balance and the amount one wishes to settle for. Example: My current outstanding balance is [Insert Amount]. At this time, I am able to settle this account for [Insert Settlement Amount]. In return for settlement, I ask the following:
1. Any and all litigation and debt collection is ceased.
2. My account is shown to be fully paid.
3. Negative listings to the three main credit bureaus – Equifax, Experian, and TransUnion – are removed.
The third paragraph explains the results of acceptance of this settlement. Example: If the terms of this settlement are accepted by [Insert Creditor’s Name], I will mail a money order or check in the amount of [Settlement Amount] paid to [Creditor’s Name]. In exchange for this payment, [Creditor’s Name] agrees to forward this letter to the credit bureaus listed above and agrees to send me documentation closing my account. Thank you for your time.
The closing of the letter should list your name and address and should include a signature. It will help, too, to have a witness sign this letter and to have it notarized. Doing all of this protects the individual and ensures this debt will be settled.
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