A debt settlement offer letter is a negotiation tool that can help you to deal with unsecured debts like credit card debts. When you become unable to pay the debts that you have incurred, trying to settle or negotiate your debt with your creditors can be a better alternative for both you and the lender. However, you want to make sure you understand exactly what you are doing when you write a debt settlement letter and that you both write it correctly and send it at the right time in order to have the best chances of success.
Tips for Debt Settlement Letters
When writing a debt settlement letter, there are a few key things you should include:
- You will want to ensure you are sending the letter to the correct person- someone who actually has the power to negotiate with you. Send the letter to the collections department or, even better, to the name of a specific supervisor in that department if you have been speaking to someone on the phone.
- You should consider sending the letter certified mail so you can be certain it is received. You will also want to keep a record of any correspondence or response so if the lender agrees to a negotiated debt settlement, you will have written proof of it
- You should firmly and clearly state what you are offering to the lender. Usually, you can negotiate to pay less than the actual amount of the debt that you owe, but you'll have a better chance of doing so if you offer to make the payment in a lump sum. If your settlement letter offers a payment plan, the lender is going to have less incentive because there's no guarantee you'll actually follow through with that repayment plan.
- You may wish to try to negotiate for other things in the settlement letter too- for example, you may request that if you settle the debt, they will delete the negative information (including the information about the settlement) from your credit report.
The best time to send your letter is usually after you are a few months behind on payments, but do not wait too long of a period of time or the creditor could sell your account off to a collections agency.
In the vast majority of instances, it is a wise investment to hire a debt settlement attorney to write your debt settlement letter for you. Your attorney will know exactly what the letter should contain and the lender is likely going to take you more seriously if you have gotten legal help involved.