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Do It Yourself Debt Settlements -- 21 Sample Letters Included

Whether it be credit card debt, payday loans, medical debt or other unsecured debt (other than student loans, alimony and child support), creditors and debt collectors will often accept as little as 25 percent of the debt as payment in full when they believe the debtor cannot pay and is judgment proof, meaning the debtor has few assets to seize through a lawsuit.  The sample letters below are part of our online Debt Negotiation section.  Some of you reading this have been contacted about really old debt that is probably out of statute.  If this is so, you might be interested in visiting our "Handling Debt Collectors" section before dealing with a debt collector.

21 Sample Letters to Negotiate Debt and Get Debt Collectors to Leave You Alone

This section contains sample letters you can use to negotiate reduced settlements or alternate payment arrangements with your unsecured creditors and debt collectors, as well as letters to send to collectors to stop debt collection harassment.

Debt Negotiation. Some of the sample letters will help you obtain alternate repayment plans and permanent reduced settlements. It is best that your initial contact with a creditor (or debt collector) be by telephone, so use the letters afterwards and only after reading the information. You can glean what you should say to them from the sample letters offered below.  Always follow-up your telephone conversation with a letter setting forth what was discussed over the phone and which sets forth the terms of the agreement made over the phone.  To protect yourself, you might want to send the letter certified mail, return receipt requested (particularly if you're dealing with a bill collector).

If your trying to get a reduced settlement or alternate payment arrangement, you will get better results if you disclose information that convinces them that accepting your proposed agreement is the best thing for them.  Such proof would be a pink slip or other proof of unemployment; a doctor's report that you have a serious or terminal illness or at least a long-term illness that has left you in serious financial trouble; or proof that you have suffered a permanent decline in income.

Some creditors will be glad to work with you and will accept you in to their hardship program immediately -- not because they care about you -- but because they understand that this is the best way for them to collect as much as they possibly can from you.  Other creditors will refuse to work with you.  These creditors have determined that they make more money in the long run by sticking to their current collection policies. 

Debt Collection:  Some of the sample letters below are to stop debt collection harassment and cite federal law.  The Fair Debt Collection Practices Act applies only to debt collection agencies, collection attorneys and to the IRS.  It does NOT apply to original creditors, such as credit card companies, although many of them will comply with your requests to stop phoning them, etc., if you ask. 

21 Sample Letters to Negotiate Unsecured Debts and Stop Harassment:

Letter 1:  To Creditor: Request a Temporary Payment Reduction
Letter 2:  To Creditor: Request a Proportional Payment Schedule
Letter 3:  To Creditor: Request a Reduced Settlement
Letter 4:  To Debt Collector:  Debt Settlement Letter
Letter 5:  To Creditor: Request Temporary Payment Suspension
Letter 6:  To Debt Collector: Propose Payment Schedule 1
Letter 6a: To Debt Collector:  Propose Payment Schedule 2
Letter 7:  To Creditor: Request a Lower Interest Rate to Ease Debt Load
Letter 8: To Debt Collector:  Stop Harassing Me!
Letter 8a: To Debt Collector:  Cease All Contact
Letter 8b: To Debt Collector:  Failure to Contact Attorney
Letter 8c: To Debt Collector:  Contact at Inappropriate Time
Letter 8d: To Debt Collector:   Illegal Contact by Post Card
Letter 8e: To Debt Collector:   Stop Contacting Me At Work
Letter 8f: To Debt Collector:   Requested a Post-dated Check
Letter 8g: To Debt Collector:  Cease Abusive Conduct
Letter 8h: To Debt Collector:  Unauthorized Disclosures to Third Party
Letter 9: To Debt Collector:  Don't Owe Debt (First Letter)
Letter 9a: To Debt Collector:  Don't Owe Debt (Second Letter)
Letter 9b: To Debt Collector:  Dispute Validity of Debt
Letter 10:  Report Debt Collector to FTC
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