How to Reduce Payment Letters to Creditors


Struggling to keep up with payments on debt is a common problem in today's economic environment. Fortunately, creditors will reduce payments in certain circumstances. It is best for a debtor to put the request in writing, explain the situation that warrants a reduction in payment, outline a proposed payment plan and provide any other information that is useful to the creditor in making a decision. Creditors will sometimes take reduced payments if they are confident you will default on the debt anyway.

Send a letter to the creditor. Although you can call and negotiate payment reductions, it is best to have a written record of your request.

Identify yourself and the debt that you currently have. Also include any account numbers or other information that will help the company identify the debt. List the principal amount of the debt, the interest rate and your regular payment.

Explain the circumstances that make you unable to keep up with your current payment. For example, if you have lost your job or had a drastic change in your financial situation it should be explained in detail. It is important to explain some factor that has changed since you entered into the contract to repay the debt.

Tell the creditor what you are able to pay. The creditor may not lower your payment to what you say you can pay, but it helps to explain what you can afford. For example, you could say that although you can't afford to pay $500 per month, you are able to pay $350 per month.

Thank the creditor in advance for its consideration of your request and provide the best way for them to contact you.

Tips & Warnings

  • Be courteous and respectful in your letter and explain that you would be extremely appreciative if your payment is reduced.
  • Do not threaten to default on the debt if your request is not granted. It is acceptable to explain that you are unable to make the current payments, but do not explain it in a hostile manner.

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