A Sample Debt Settlement Letter for
Credit Card Debt Settlement
A debt settlement letter can be an effective strategy to eliminate credit card debt and
legally improve your credit scores.
Fill out the form below for a free sample of a debt settlement letter that you can modify to fit your situation:
Keep in mind that negotiating a debt settlement with
a collection agency is different than negotiating a debt settlement agreement with an original creditor.
First of all most original creditors, like banks or creditor card companies, will usually not
even consider a debt settlement unless your account is 60 to 90 days delinquent. However,
if the account goes beyond 150 days delinquent, it may be too late to negotiate the debt
settlement with the original creditor, because they will usually "charge off" the account and send it to collections.
So if your account is at least 60 to 90 days delinquent and you confirm with your
original creditor that they still have the account, you can then attempt to negotiate a debt settlement.
Start by sending a settlement letter to request the creditor to accept an amount that you
can pay to settle the debt. The letter must be written in such a manner to convince
the original creditor of the following:
1. Their best chance of collecting any money from you is to accept the proposed settlement in your debt settlement letter.
2. You do not have any assets.
It is very important to convince your original creditor of these to points to motivate them to consider
the terms of your debt settlement letter. Otherwise, they may simply expect you to continue to make timely
payments. It's best to contact your credit card company by phone and attempt to settle the debt. Make sure you
let them know you don't have any assets and you do not have the ability to continue to make timely payments.
Most credit card companies and banks have made policy decisions to not agree to a debt settlement
in writing. However, unlike negotiating with a collection agency, it's usually acceptable to rely
upon their verbal commitment to accept the debt settlement. When it comes to credit accounts, banks
and credit card companies are more heavily regulated than collection agencies. But make sure you keep a
record of who you spoke with and when.
Alternatively, you may mail your creditor a settlement letter to make an offer to settle your
credit card debt. Again, they usually will not reply with a written confirmation of your debt settlement agreement.
Also, they will usually only agree to report your settled account as "settled". But this is better than
reporting the account as "charged off".
In order to correct an error on your credit report, you need to inform the credit reporting agency, collection company or original creditor in writing what
information you believe to be in error. Those letters need to be properly formatted and with the right information to be the most effective.