How to Write a Settlement Letter
A settlement letter, also referred to as a debt negotiation letter, is used to negotiate with creditors. You can request that a creditor validate the debt and send proof of the debt. If the debt is not validated, the credit bureaus will remove the debt. If the debt is validated a respectable debt settlement letter is an appropriate way to approach a creditor to negotiate a reduced balance or payment. Obtain a copy of your credit report for information relating to your creditor if needed.
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Instructions
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Enter debtor and creditor information. At the top of the page in your word processing program, place the debtor's name, and address, and beneath it place the name and address of the creditor---also naming the contact person at the creditor's company. Leave a couple of blank lines and enter the date below the contact information of the creditor.
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Provide the account number. After entering a blank line below the date type: "Re: Settlement of Account #," followed by the account number on file with the creditor. This line is stating that the letter is regarding the settlement of your account.
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Refer to the amount owed after the standard letter salutation, introduction, and account number. Show the total amount owed including both dollars and cents.
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Explain the financial setback or change in circumstances. This can range from unexpected medical expenses or recent unemployment.
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Propose an offer. Inform the creditor of the maximum amount you can comfortably pay. If the letter is for a reduced overall balance, than that amount is given, and the same holds true for a reduced monthly payment. Once the proposal is in place, the letter is then signed and ready for delivery.
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