Let me ask you a question. Are you searching for a way to reduce your bills through some form of settlement? If so, you may have an understanding of what a debt settlement letter is, and how it could help you financially. You can also look at these letters as a powerful debt negotiation tool.
These letters are very straight to the point and persuading. They could be used in court if either party broke their agreement. These letters are very important if you expect handling debt negotiations yourself and not employ a third - party company. In the planning stage of negotiations, you must understand how to craft a convincing letter that gets results. Understand that a convincing letter is one of your secret weapons to reducing your debt load in a big way. Keep in mind that you must convince the lender that it is in their best interest to settle with you. This in returns lowers your debt.
Right before send out your first letter to the lenders or collectors, make sure that you have a basic knowledge on how the game works. You have to know the ends and out of debt settlement because the creditors and collectors are masters in this area. Here are a few tip you can use when crafting your convincing debt settlement letter.
1. Because the debt settlement letter could be used in court, have an attorney review it to make sure all terms are accurate.
2. You can also seek the advice of a friend who has successfully negotiated debt with these types of letters.
3. Make sure you understand the terms and conditions that you are asking for in the letter.
4. Include what you want eliminated like, fees, taxes, and interest rates.
5. Include the total amount you can pay in the settlement.
6. Let the creditor know that in exchange for the payment, you want the negative item deleted from your credit report.
7. Creditor's know most of the strategies used by consumers and debt settlement companies, so do not try to trick them with words like if you do not accept my payment, I will file bankruptcy. Instead, say that this is all the money I have, and I am are currently unemployed.
Here is a sample debt settlement letter that you can use as a model to write your first letter.
Your name:
Your address:
Address of the creditor or the collection agency:
Date:
Reference account number:
Dear creditor or collection agency,
In the last six months, I have been facing hard times with a lost of my job, my mother passing away and my brother going to jail. I sincerely apologize for falling behind on my debts, but I assure you my neglectfulness was circumstantial. Now that I have a job, I'm ready to settle my outstanding debt, and I would like to offer you 20 cents on the dollar (put a dollar amount here) for a deletion of all negative information from my credit report and no further collection activities. Currently, I'm in negotiations with other creditors on a similar deal, and I would like to close my account with you fast. If I receive a signed agreement from you, I will gladly send payment out overnight.
Sincerely,
Your signature here.
In summary, know what you owe and then compare it to what you have in your bank account. By doing this, you will know where to start with your negotiations. In addition, some creditors will ask for 80% of the balance but this is just a starting point of the settlement. You do not have to have that amount to settle with as it is just the start of negotiations. Your letter must be accurate due to its legal nature, and always double - check the terms and conditions of the letter before sending it out. Now that you are empowered with more information, go out there, and take action.
Mark Clayborne is a Certified Credit Consultant with ten years of experience assisting consumers with credit issues. For more powerful secrets on credit repair, debt settlement, stopping collectors, rebuilding your credit, and raising your score, please read the first chapter of The
