Debt Settlement Offer Letter Template

How to Write a Debt Settlement Offer Letter?

Follow these steps to draft a Debt Settlement Proposal Letter:

1. State the name of the creditor or financial institution you owe money to.
2. Introduce yourself and refer to the agreement you have signed with the letter recipient or your account to facilitate identification.
3. Confirm you are aware of the debt you owe and offer the creditor to settle it for a reduced amount. Depending on your current financial standing and the sum of debt, you can propose to pay a lump sum in exchange for the debt forgiveness or offer smaller installments than the ones you have to pay every month now.
4. List the reasons that do not allow you to pay the full debt. You may refer to your illness or injury, a health issue of one of your family members, the death of the main breadwinner in your household, unemployment, or natural disasters that complicated your life and led to financial hardship. Note that your claims must be supported by evidence so do not forget to attach the documentation that proves your words.
5. Directly communicate your wishes. Your target is to settle the debt for a certain sum of money and request the creditor to report the account as paid especially if you have encountered difficulties obtaining a loan or credit card from another creditor due to poor credit history.
6. Add your contact information and ask the letter reader to reach out to you to discuss the matter in further detail. Sign and date the document. You may send it via traditional mail or e-mail; however, consider using certified mail if you have had extensive correspondence with the bank in question and you believe you may have legal disputes with them in the future.

Haven't found the template you're looking for? Take a look at the related templates and samples below:

• Lump Sum Debt Settlement Letter Template;
• Sample Request for Debt Settlement Letter;
• Sample Cease and Desist Collections Letter.