What a Debt Settlement Letter Should Look Like
When settling unsecured credit card debt and a debt settlement is requested make sure the letter gets written in creditor or collection agency letter head. Do not accept a letter on a plain piece of paper from anyone. Make sure that at least the company's full name, mailing addresses appear on the letter.
Make sure the letter is dated properly. This will ensure if any questions regarding the settlement ever arise, the exact date the settlement deal was put into place can be pin pointed. This will also help with credit repair efforts.
Your name and mailing address spelled correctly as it appears on your statements must be properly entered on the letter. Any misspelling or wrong mailing address can be the cause of future collection efforts on the account.
Account number must be properly noted on the letter. Sometimes in our rush to cash in on a settlement we overlook this or miss the fact that the account number is improperly entered on the letter. Again, original account number must be entered properly on settlement letter.
The body of the letter spelling out the settlement terms should read something like this:
Dear John xxxxxx,
This letter is to confirm the settlement arrangements that we agreed upon verbally on Monday, January 18, 2009. XYZ Creditor will accept $2,000.00 of the outstanding balance of $4,000.00 on your credit card account as full settlement of your debt.
To accept this offer, the settlement amount will be in one lump sum payment of $2,000.00 due on January 30, 2009.
After payment has successfully posted to your account, we will notify the national consumer credit reporting agencies that the account has been settled in full. You will not be obligated to pay the remaining balance, provided that no additional charges are made to the account, after the date on this letter.
Please be advised that any settlement balance in excess of $600.00 must be reported to the IRS under 1099C filing. This letter serves as a confirmation of your settlement. The terms of this offer will not be reflected on your monthly statement.
If you have any questions or concerns, you may contact settlement lady at 1-xxx-xxxx.
Sincerely,
Settlement lady,
Charge-off prevention
This last part of the letter is most important, the signature and department of the person authorizing the debt settlement agreement. In an effort to minimize future collection efforts on an account previously settled the above format for a settlement letter will help in avoiding future headaches.
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What a Debt Settlement Letter Should Look Like
When settling unsecured credit card debt and a debt settlement is requested make sure the letter gets written in creditor or collection agency letter head. Do not accept a letter on a plain piece of paper from anyone.
What Not to Do Or Say When Pursuing Debt Settlements
There are certain things one must not due or say when pursuing settlements on unsecured debt, the most important one obviously is not to tell your creditors you want to settle your accounts.
