Using a Letter to Assist in Debt Negotiations
Once your creditors agree on a payment plan over the phone, it's time to get it in writing. Generally speaking, a creditor isn't about to go out of their way for just one debtor. So, you will have to write out the payment plan and send it via certified mail to document the process. It's not as difficult as you may think, and really it isn't all that scary.
You just need to make sure all the important information is included, such as your account information with the creditor, your plan, and what you expect of the creditor once it is paid. If you would like, just use the letter below and edit the lines with parentheses to suit your needs.
Video: Tips on how to write a debt negotiation letter
Sample Debt Negotiation Letter
VIA CERTIFIED MAIL RRR # (NUMBER OF THE CERTIFIED MAIL RECEIPT)
(YOUR NAME)
(YOUR ADDRESS)
(CITY, STATE, ZIP CODE)
(DATE)
(Creditor's Name)
(Creditor's address)
(Creditor's city, state, zip)
RE: Acct.# (5555554441)
Dear (representative you spoke with):
As we discussed, (reason why you were unable to pay). As a result, my account with (creditor) was (sent to collections or charged off). I would now like to either resume payments on this account at $(amount) per month.
Also I would like to note, I recently obtained a copy of my credit report and noted that your company has reported this account as delinquent. I wish to bring this account or matter to a resolution that will be fair, and beneficial for both of us. I hereby propose to pay you: (X) monthly payments of $(amount), or send a check to you in the amount of $(debt) as payment in full provided you send a letter beforehand stating you will report this to any and all credit reporting agencies as: 'PAID AS AGREED' or notify me in writing that you agree to delete this item from any and all credit reporting agencies.
Due to the inequities of the system I am not agreeable to accepting a 'PAID P & L' or 'CHARGE OFF' for an additional amount of time on my credit report. (You may add your own reason why it is unfair to leave the black mark on your credit report, or simply state "This problem has caused enough damage to my financial life, and I believe it is time to move forward now that I am more able.")
Upon receipt of your letter in agreement to the terms above I will forward a cashier's check or money order in the agreed amount.
Yours Truly,
(Your signature)
(Date)
(Your name typed/printed)
(Date)
Other Notes
Remember, this letter is just to verify and review what was stated over the phone. It should not be used alone in your debt negotiations - definitely speak with a representative first. Make sure you get your creditor's promise to remove any harmful statements from your credit report in writing before sending any payments.
Video: Can you negotiate debt with your credit card company?
Also, do not send post-dated checks or give them access to your banking accounts. At worst, get a written payment schedule from the creditor before allowing automatic withdrawals - even still, it may mess up your account.