Mistakes Made In Debt Settlement Letters

If you are currently in debt and are working through the process of settling that debt with your credit card companies or other agencies to whom you owe money, you are already familiar with the concept of debt settlement letters.  The debt settlement letter constitutes the formal agreement between you and the creditor to whom you owe money regarding how much of your debt is going to be settled and how much and in what process you will have to pay back the unsettled portion of your debt.  Mistakes in your debt settlement letter can result in delays in the debt settlement process or even higher costs as you become eligible for more debt than you initially agreed upon.  There are some common debt settlement letter mistakes you should avoid.

Common Mistakes in Debt Settlement Letters

• The first mistake in debt settlement letters that many debtors make is failing to note the amount of debt which is being settled and how it is to be repaid. 

For example, if you owe $20,000 and have agreed that the credit card company will settle the debt upon four equal payments of $1,000 for a total of $4,000 repaid, you will want to make sure that you lay this information out specifically.  If the letter states that five payments are to be made, you will have cost yourself an extra $1,000 through that simple mistake alone.  Being very cautious with your proofreading is a key to not making mistakes in debt settlement letters.

• Another common mistake in debt settlement letters is failure to correctly note or apply the terms of the settlement. 

Those same four payments of $4,000 discussed above may have originally been agreed to paid monthly, quarterly, or in some other fashion as negotiated.  Do you have this information correct in the settlement letter?  If not, you may make the wrong amount of payments at the wrong time and run into trouble.

• Furthermore, since these debt settlement letters are legal documents, they must be properly formatted and signed according to required terms.

Any mistakes such as punctuation, failing to sign or properly date the letters, or other minor mistakes can lead to the documents being considered invalid, and the lender may be able to take you to court or otherwise disregard the terms of the debt settlement letter and pursue restitution against you for the full amount of the debt which is owed. Making sure that you are carefully and correctly wording and completing your debt settlement letters is a key to avoid problems with your debt settlement process.

Getting Help

To ensure that no mistakes are made in debt settlement letters with your creditors, it is a good idea to consult with an experienced debt settlement attorney. Your attorney can review any letters or settlement offers and make sure that they contain the details and language necessary to protect you and to settle your debt once and for all.