How to Write a Debt Settlement Offer Letter

Maybe you got laid off or maybe you didn't realize that your credit card debts or other debts were adding up so quickly. Whatever the reason, you're now in over your head and you need to find a way to reduce your debts and fix your credit report at the same time. Fortunately, there may be a way you can do both. By writing a Debt Settlement Offer letter, you are notifying your creditor that you can't pay them as agreed but that you are willing to pay them something. Here's how it works.

Instructions

1

Type the creditor's name and address at the top of the letter, flush with the left margin. All of your sentences will line up with the left margin on this letter. Double space and type in today's date and two spaces below that, type in the Account Number.

2

Start your letter off with "Dear Sir/Madam," unless you know the full name of the person you're trying to contact. In that case, use his or her full name.

3

Explain that you are attempting to settle a debt with this creditor and that you apologize that you were unable to do so before. Say that while you still cannot pay the debt in full, you would like to offer a compromise debt settlement amount and in return, the creditor will remove all negative information from your credit report.

4

Mention that you have other debts and that you are only able to pay those creditors that agree to your terms. Explain that you will be unable to pay any more than you are offering.

5

Close by stating that you have enclosed a separate "Letter of Agreement for Debt Settlement" and that if they agree with your offer, they must date and sign the letter and return it to you.

6

Draw up the Letter of Agreement for Debt Settlement to your exact terms. It should state the amount of money you will pay and that, in return, the creditor will erase all negative information from your credit report. It is VERY important that you include this letter and that you do not pay the creditor anything until he signs and returns the agreement form.