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Sample Debt Letter 3
Request a Reduced Settlement


Name of contact, Name of company
City, ST  Zip

Re:  Account of [name account is under]; Account No. [insert account number]

Dear _________:

This letter is to follow-up on the telephone conversation we had on [date] wherein I advised you of my dire financial condition.  As I told you on the phone, I have recently become disabled, and my current monthly income has been reduced to such a low amount that it barely covers my rent and basic necessities of life.   Because my health problems are permanent and I have nothing of value to sell and no money in savings, there is no way I will be able to pay my debts in full.  For this reason, I am trying to avoid filing bankruptcy by contacting all of my unsecured creditors and asking them to accept a reduced amount as payment in full.

My monthly net income in the form of a disability payment is $_____________ , and my basic living expenses are as follows:


Total $_____________________

As you can see, this leaves me $__________ each month to pay all of my unsecured creditors, who consist of the following:

Creditor       Total Amount Due  Average Monthly Payment

X Credit Card$[total amount due]$[avg. monthly payment]
Y Credit Card$[total amount due]$[avg. monthly payment]
Z Credit Card$[total amount due]$[avg. monthly payment]

Totals   $___________$____________

I am proposing a settlement of 30 percent of the total amount owed as payment in full for this debt to your company, as well as the other two listed above.  Thirty percent of $[total amount due] is $____________, which I am requesting be paid back to you in the form of a payment each month in the amount of $____________ for the next [number of months] months.  

Please contact me as soon as possible and advise me whether or not this settlement is agreeable to you.  I want to do everything I can to avoid filing bankruptcy and am hoping I can work out some sort of settlement with my creditors.  Thank you for your attention to this matter.


Your name
Complete contact information

Related articles:  Alternate Repayment Plans and Reduced Settlements

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