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What Is Debt Settlement Letter?

Back to questions list July 16, 2020

Debt settlement letter is a letter written by the borrower to the lender when he can’t pay off the debt. Situations on the verge of default might happen to everyone. Still, lots of people make a huge mistake when they decide not to discuss this situation with the lender. You should understand that it’s always easier to fix an issue before it happens and leads to particular consequences.

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Furthermore, a lender is a human, who can also get into a similar situation. Therefore, writing a debt settlement negotiation letter makes sense.

A good debt settlement offer letter has to include:

  1. Details about your amount such as the total amount, the amount that you have already paid back, and the amount that you still have to pay. You must also mention the remaining period.
  2. You should also ask to improve your credit rating and remove late payment records if you write a debt settlement letter paid in full.
  3. You should also propose a potential solution and mention time period, rate of interest, and the most suitable periodic installment.

When you write a debt settlement letter to a collection agency, you should keep in mind real solutions that fit your opportunities. You can also ask for consolidation and assistance.

Before writing a letter, we recommend you to check out a sample debt settlement letter or use a template.

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