Check out the sample debt settlement letter and use it to negotiate with creditors.

I’ve been sued by a law office representing a company (junk debt buyer) for a credit card bill 3 years back. Though I’ve answered to the summons, I don’t want to take the issue up to court. I want to settle something outside. I’ve already talked to them and they have agreed to decrease the amount to 40% of the total outstanding balance. Now I want to make sure everything happens in writing and therefore, want to send them a debt settlement letter.

2 Answers
Votes: 
4 votes
+
Vote up!
-
Vote down!

This is a sample of a 'settlement letter'

Your name
Address
City, State and Zip
Today's date

Creditor Name
Address
City, State and Zip

Re: Your Name
Creditor's Account Number
Your Social Security Number

I (name) wish to settle the outstanding debt with (creditor). (Explain why you've fallen into debt.) I strongly wish to pay back this debt.

Currently, the outstanding debt balance is (dollar amount). I am willing and able to settle this amount for (amount you can afford to pay). As part of this settlement I am making the following requests:

My account will be shown paid in full.
Any ligitation is dropped.
All negative listings will be deleted from the three credit bureaus below.
Equifax
Experian
TransUnion

Upon acceptance of this letter (creditor name) agrees to the terms and settlement conditions and I (name) will send an overnight money order in the amount of (settlement amount) paid to (creditor name).

(Creditor name) agrees to forward this letter to the three credit bureaus listed so negative listings may be deleted.

(Print Your Name) (Print Date)
(Sign your name)

-----

But you need to have also a 'settlement agreement' - you can find a sample online - if you type the words. The settlement agreement is more complex, and i believe needs to be notorized...not sure. you need to find more information. It is easy to settle, but  it needs to be done very safe, in order that in few years the same collection agency/creditor not to come again after you for paying the other part of the money that was forgiven. Good luck!
 

Votes: 
2 votes
+
Vote up!
-
Vote down!

I guess situation is on your favor. You just need to send them a debt settlement letter and ask them to reply in writing if they consent to the offer you made. After this, you can send the payment in money order and request a receipt. You can also request to erase all the negative reports on your credit file. See if they agree to this!


Ask Question

Waterfall approach to debt free ™

Legal debt relief methodology that works based on your financial conditions. Learn more »

BBB-A--Rating