Debt Consolidation

How To Write A Proposal Letter To Your Creditors For The Settlement Of Debt?

Creating a proposal offer to your creditors regarding the is not at all an easy task. After all, you are trying to negotiate a deal where the creditors apparently have to bear some loss while you get the benefits. You have to make the offer in a way to convince them that you are going through a very bad financial situation and that your proposal is in the best interest of both the parties. Following is a detailed overview on how to go about it.

Have A Counter Offer Ready In Case Your First Proposal Gets Rejected

The first proposal is often rejected by the creditors, but the good news is that you can always make a second offer. Prepare an initial settlement offer, explaining the repayments terms that you can afford. You can propose to pay certain percentage of the total outstanding balance either in installments or in one lump sum. Considering the very fact that the creditors are likely to reject this first offer, it is always better to keep the percentage low. For example, you can offer to pay 30% of the total outstanding dues in final settlement of debt. But, you must have a counter offer ready in case your first proposal is rejected. In your counter offer, you may tell them that you will have to raise the percentage to say 40% or even more. It is entirely up to you to decide how high you can go and what kind of repayment terms you can afford.

Structure Of The Letter

You must include a subject line referencing your account number and address the letter to your creditor along with their contact details. You also need to provide the basic information about you, such as your name, address, telephone number, and email address. It will be better if you also describe your financial situation briefly. If you do, do not forget to attach supporting documents. Just writing that you are going through a financial crisis will not do any good; you must provide documents in proof to convince your creditors.

Reporting Of Debts To Credit Bureaus

While you are writing the proposal for the settlement of debt, you must also suggest the ways on how you want the debts to be reported to the three major credit bureaus. The debts can be reported in various ways, such as “paid in full”, “paid but not as agreed”, or “settled”. You will need a written record if the creditor agrees for the proposed way of reporting.

If your creditor accepts the proposal by signing it, you can send them a certified check (it should never be a personal check) for the payment. Do not forget to write a memo line – “Cashing this check constitutes payment in full”. Keep a copy of both the check and the letter in a file. The creditor should also provide a return receipt regarding the .

Custom Search

Tags: , , , ,
Posted in Debt Consolidation, Debt Settlement | 5 Comments »

5 Responses to “How To Write A Proposal Letter To Your Creditors For The Settlement Of Debt?”

  1. legit online jobs says:

    This is a good blog. Keep up all the work. I too love blogging and expressing my opinions. Thanks :)

  2. Help With Debt :: Debt Consolidation Credit Help - A Ray Of Hope :: August :: 2010 says:

    [...] Payday relief is ready to lend a hand to save you from drowning in a quagmire of debts. Get free debt consolidation advice and rebuild your credit score. If you are suffering from bad credit, free debt consolidation help is there to provide you solace. Come have a look at the complete details of loans available to you. [...]

  3. Whitney Vear says:

    Thanks for generating your blog page, I located you on Google and I should say I’m fascinated. Thank you repeatedly…

  4. wrinkle serum says:

    hi, thank for this latest information. Therefore, I would like to ask for your permission to add some of this information in my blog. Of course, I will provide a link to your blog, as a source of my quoted information.

  5. admin says:

    Yes you can use the content by providing a link to the concerned page of our website. Thanks for your comment.

Leave a Reply

You must be logged in to post a comment.