If you plan to handle your debt settlement issues on your own, you will need to send out written notification to each creditor. Written statements of your intent and settlement offers must be sent by certified mail with return receipt. It is very important to keep a copy of each letter, original postal receipts, and the returned receipt with the creditor’s signature.
To begin the debt settlement process, you must send out an initial settlement offer. This is also called an unsolicited offer. It is a good idea to type the letter and sign the bottom, as this indicates a willingness to address the debt in a professional manner. In this letter, you will propose that you pay a smaller amount of money than the original balance. Start your negotiations by offering 50% of the original balance. For example, if you owe $2,000 on your ABC credit card, offer to pay $1,000 to settle the debt in full.
Here is a sample letter for this process:
Consumer’s Name Today’s Date
Consumer’s Phone Number
Name of Correct Department
Creditor’s Full Address
I am contacting you today in regards to account number _______________________
After a lengthy time of financial hardship, I am now in a position to satisfy the debt under the aforementioned account number. I would like to ask for your cooperation in helping to resolve this debt. I am putting forth a sincere effort to settle my debts and pay them off.
I would like to propose a full payment toward this debt in the amount of $ _______. I propose that this amount be accepted as payment in full of the aforementioned debt. In addition, I would like to request that all late payment remarks or charge-offs be removed from my credit bureau reports.
I am currently working cooperatively with several additional creditors for debt settlement purposes, and therefore, my funds are limited. For this reason, I have chosen to settle those debts which can be satisfied through settlement proposals, such as I am proposing to you today.
A couple of my creditors have already made acceptable settlements with me. I would like to include this debt among the paid account. If the above proposal is acceptable, I will pay the agreed upon balance in full. Please sign the bottom of this agreement. Please keep the original for your records and send me a copy of the signed document. Upon receipt of the signed agreement, I will send you the agreed upon funds via money order in a timely fashion.
Consumer’s Printed Name