Debt settlement letters, which are documents written for the purpose of negotiating loan terms with creditors, come in different types. These letters, which are also called negotiation letters, are written as answers to legal actions to be undertaken by creditors in the event of default in mortgage payments.
The different types of debt settlement letters include counter offer letter, unsolicited offer letter, validation letter, and alternative payment plan request. In the counter offer letter, the borrower proposes an amount that he/she can afford in lieu of the full amount that the creditor is demanding. If you are going to write this type of letter, you need to justify the reasons behind your inability to submit full payment. You should also include personal information such as your name, address, phone number, and account number. Don’t forget to attach a letter of acceptance, which the creditor will sign if he/she agrees to the amount you proposed. An unsolicited offer letter is a request for waiving of any penalties or fees associated with late payments. This letter should give a clear explanation to justify the request. In a validation letter, you may request proof of debt such as document of the agreement for the debt, history of payments, and so on. Finally, for the alternative payment plan, the debtor will propose certain changes in the payment terms such as extension of payment duration or lowering of monthly payment. Like the other previous letters, this one should also explain the need for the request as well as give assurance that the debt obligations will be met if the request is granted.