How To Write A Debt Settlement Letter
Write an effective debt letter
If you have decided to negotiate a debt settlement with your creditors instead of relying on a third-party agency to do it for you, it's vital that you know how to write a debt settlement letter. Writing an effective debt letter is the all-important first step to getting yourself out of financial hot water, and it's imperative that you tailor your correspondence to your specific situation rather than just relying on a generic sample debt settlement letter. That said, it is advisable that you check out a sample debt negotiation letter to generate ideas.
Before you learn how to write a debt negotiation letter, you need to understand what the letter is for and what it does. A debt settlement letter, if it is accepted by your creditor(s), forms the basis of a legally binding contract. Thus, it needs to be accurate, truthful and, most of all, manageable.
How to Write a Debt Negotiation Letter
There are seven parts to an effective debt letter:
Your full legal name, address and contact information. These should be included at the top of the letter to be sure the creditor can contact you in regards to your proposal.
- The name and address of the creditor. For legal purposes, you must list these so there is no confusion as to who you are negotiating with.
- A specific address or contact. If you have spoken to a specific individual about your situation, address the letter to them to make sure it falls into the right hands.
- A thorough explanation of your situation. Explain why you are having problems with your debt load and give specific examples of how you plan to deal with it.
- A complete listing of all your current debts. Include this so the creditor has a thorough understanding not only of what you owe them, but what you're dealing with as far as your other creditors go.
- A settlement proposal. Be realistic in your proposed solution; if there are factors that may affect or enhance your ability to pay (such as an increased salary, new job, impending layoff or the possibility of getting a debt consolidation loan).
- Signature and date. Don't forget these, as they have an impact on the legal applicability of your debt settlement letter.
Before you send the debt letter, be sure that it is comprehensive and complete. If you have multiple creditors, be sure to tailor the letter to each of them rather than simply sending them all the same letter.