A Debt Negotiation Sample Letter

Probably the most difficult part in writing a debt negotiation letter is starting it. It would help if you have some sample letters in which you could pattern your own. Here is an example of a debt negotiation letter that you could send to your creditors when you cannot seem to meet their payment demands.

The basic format of a debt negotiation letter is as follows:

Date Today (dd-mm-yyyy)

Your Name

Your Current Address

Name of Debt Collector

Address of Debt Collector

RE: (Account Number of Debt Owed, Name of the Customer and Debt Type)

Dear Mr./Mrs. Name of Debt Collector, (or if not known Sir / Madame)

I have received your (phone call or letter) last (dd-mm-yyyy) and I acknowledge that I owe a total amount of ______ in debt to your company. I am not contesting this debt but I would like to inform you that my present financial situation does not really allow me to afford the monthly payments you are requesting for. However, I would be able to make a specific payment of ______ at the start of each month, beginning on (dd-mm-yyyy).

I would truly appreciate if you could reply to my letter and be able to confirm the acceptance of my proposal of payment terms. Also, I have enclosed a cheque as my first debt payment. If I do not receive a reply from you and if you cash in the cheque, I will assume that you have accepted the payment terms I have laid out above. But if you are not acceptable to the payment terms I have proposed, I would appreciate it if you please return the enclosed cheque in the self-addressed stamped envelope included.

I hope you understand that I am not trying to run away from my debts, which is why I have sent you this letter. Thank you for your consideration.

Sincerely yours,

Your Signature

Your Printed Name

Date signed (today)

This is just an example of a very simple debt negotiation letter that you can easily do yourself. There are more tips you should take note of when you write your own debt negotiation letter as follows:

• Although it may seem tempting, do not threaten your creditors by indicating that you will file for bankruptcy if things do not go your way. Issuing a statement like this in your debt negotiation letter may even make the creditors less agreeable to your proposal.
• When you enclose your payment in your debt negotiation letter, use money order or check. Do not ever send cash.
• After you have sent your debt negotiation letter and you and your creditors have made an agreement, never assume that your credit rating would go up after your creditors have already cleared your debts. Check back with the bureaus to make sure they have properly adjusted the pursuant to your clearance.

Now you know what to write in your debt negotiation letter and how to go about it.

You may like to refer to other articles on MoneyBeacon such as 'What is a Debt Management Plan' to help understand how you can further work to manage or clear your debts.