Debt settlement letter is an official letter which a debtor writes to his or her creditor with the main purpose of negotiating the debt for a much lower amount. It is a formal letter which you should prepare the content in a systematic manner.
Here are some important points you MUST include in this letter:
Your name, address and contact number
Your account number, the total amount of your debt, the interest rate involved and the terms of payment
How long has your account been due
A brief outline of your current financial situation and the hardship you are facing
Your request to reduce your total outstanding balance
How much settlement offer you would like to propose
How will the payment be made, for instance, you need to state clearly whether you will pay in one lump sum or by installment
How much is the remaining debt balance to be forgiven
Your statement pertaining to how the debt will be reported to the three major credit bureaus. You should request the creditors to remove all the negative items on your credit report
Besides sending this letter, it is also advisable for you to include some supporting documents in order to show your faithfulness in settling your debts. The document can be any letter or proof that shows your current financial position, for instance, a letter from your employer which stated that you have been retrenched or you may show your medical bills if you are suffering from long term illness. At the same time, you are advised to send a bank account statement which shows your financial ability to pay off your debt at certain amount which you can afford. By sending these documents, the creditors will be more convinced to accept your proposal.