Debt Settlement Program

If you are comfortable with your negotiation skills and find it unnecessary to use a debt settlement program offered by various companies, you can try to settle your debts by yourself. There are rare instances when the creditors themselves initiate the process of settlement by sending you an offer letter. However, in most instances you have to start the ball rolling. You can do this by sending your creditors a debt settlement letter.

Prior to drafting the debt settlement letter, you must have a clear idea of the exact amount you owe the creditor, how much of it is comprised of actual purchase charges and how much is comprised of interest charges. To compute these amounts, you must have a good understanding of your debt’s terms and conditions in regard to interest rates, as well as, applicable penalties and fees. A validation letter from your creditor must be secured to ascertain the exact outstanding balance owed.

Now, you are ready to draft your settlement letter. It must include all pertinent personal information and your account number. The information you will state on your letter should be the same information that your creditor has on record.

Your creditor must know and should be convinced that you are in fact unable to pay your outstanding balance. You must start your letter with the relevant details of your situation, the reason why you can’t pay them, and your supporting documents. Your creditor is only interested in facts and you’ll be better off if you stick to them.

The next part of your letter must contain your offer for settlement and the amount you are offering to pay. It is recommended that the amount you are asking your creditor to forgive should not be more than the portion comprising the interest charges in your outstanding balance.

Finally, make a firm request that your payment should be declared by your creditor as payment in full and the same should be reported to the credit bureaus.

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