The key main objective of the borrower in writing a debt settlement letter is to convince your creditors or lender. A well framed and written debt settlement letter is very powerful mean used in negotiating on the amount of the debt, the interest rate on the debt amount or the period of the debt.
Here are some useful and key tips for writing a debt settlement letter –
- Before issuing the debt settlement letter, the debtor should confirm on the exact factors which are associated with the debt. Get these 4 main information accurately validated with the lenders before you put them down into the debt settlement letter in ink: the total amount of the debt, the paid amount and the remaining pending amount, the lapse of the pay back duration etc.
- Explain and elaborate on your current financial situation and tell them what have happened which have caused you to be in this situation now. Explain the reasons why you are unable to make any payments for these debts for the last few months because of financial hardship or other more critical commitments which you need to fulfill at the mean time. State In details what are the main reasons which have jeopardize your financial obligation. These may be due to job retrenchment, loss from business investment, huge medical cost to bear etc.
- Do not hide anything from them as it is useless to fake the truth at this stage. The more they can understand your financial situation, the more likely they are to help you to settle your accounts.
- At the same time, reevaluate your financial condition and propose to your creditors on your best repayment methods with the relevant details such as the repayment time period, the interest rate charged and the best periodic installment payments or the lump sum of the repayment which you can make. Preferably the proposed date is within the next 3 months, whether it is for you to kickoff with the new installment repayment amount or a lump sum of not less than 50% of what you owe. What you have committed this time should be something which is achievable before they file any legal action against you next.
- Besides, also let them know that you are considering for filing bankruptcy should this pleading request of yours are rejected. Bankruptcy is really the last time which the creditors wanted to hear about and get to be informed of by their debtors.
- Last but not least, after drafting this letter and before sent, getting someone such as a debt professional consultant to review the content of your letter to make sure all your sentences are clearly define, sign on it with your signature and post them through registered mail will be good.