A Debt Settlement Letter is a formal offer made by a debtor to a creditor to resolve an existing debt, usually in exchange for a one-time payment the former party makes to the lender.
- Debt Settlement Agreement Letter.
Alternatively, the borrower may notify the bank or a personal creditor about their preparedness to handle several payments at once to make sure there are no more letters or calls with the request to deal with the debt immediately. You can elaborate on your financial standing at the moment and set a deadline for the offer to make sure both parties reach a compromise.
Debt Settlement Letter Types
- Lump Sum Debt Settlement Letter. You may pay a portion of your debt - for instance, 30 or 50% of the total sum you owe right now, in exchange for the creditor's consent to cancel late fees and accumulating interest. Tell the other party you are willing to rectify the situation and get rid of the debt completely or at least prevent further calls and demands from the creditor if the sum is large enough;
- Sample Credit Card Debt Settlement Letter. Prepare this document if you want to start negotiations regarding your credit card debt with the issuing bank. It is possible to offer the letter recipient to pay them back in installments especially if you need the financial institutions to remove negative marks from your credit report to take out a loan elsewhere;
- Sample Request for Debt Settlement Letter. Contact your creditor, whether it is an individual or an entity you owe money to, to inform them about your intention to handle the outstanding debt they want to receive from you and to suggest repayment in installments. Ask the recipient to call or mail you to confirm they agree to your conditions.
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