Writing a Simple Debt Negotiation Letter (with Sample)

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If you have fallen behind on your bills, don’t beat yourself up too bad, you are not alone. 

There are many people who owe money they cannot pay. You can hire a company to conduct a debt consolidation or you can do it yourself. 

Most companies will reduce the amount of debt you owe and remove any late fees or other charges if you just contact them and make an effort. A debt negotiation letter is a good way to start the discussions between you and the creditor and hopefully make financial arrangements you can live with.

This letter is important for many aspects. Should you end up in court, you can prove that you tried to settle the debt and let the creditor know you were having a difficult time paying. It also shows a willingness to work with the company. Most companies don’t file law suits on those who are willing to at least pay something. 

While they may not take $5.00 a month, they certainly can work with you. Companies who have unpaid bills have to put much effort and money into trying to collect that money. In some respects, you are saving them time and money by negating collection activities and working with them.

Formal Business Letter

Because this is a formal business letter, you need to begin as such. You need to put your name address and contact information on the left hand side, as well as the date and the company information. A subject line is appropriate. 

Think of the volume of mail that a company receives, you want to make sure they not only get it but also read it. If you have spoken to someone on the phone and got information about any programs they offer, put their name on the letter. It is always better to address a person at the company rather than the generic introduction of “To Whom It May Concern.”

First Paragraph

The first paragraph needs to have valuable account information. You want them to be able to pull up the account and look at it. Most people just skim a letter and may only read the first and last portions. 

Make sure to put all the relative information up front. Along with the account details, be sure to put your desire to work out a settlement on this account. Tell them what you can and cannot do.

Second Paragraph

The second paragraph needs to give them a reason why you need help. Have you been involved in a car accident or a medical incident that made you miss work? You need to be honest. Most creditors are more willing to negotiate with those who have a legitimate reason other than just blowing all your money on foolishness.

third Paragraph

The third paragraph should thank them for their time and consideration and should be friendly. The whole letter needs to have an appreciative tone and should not be long and drawn out. Only say what needs to be said to get the help you need, and nothing more.

The longer your letter the more likely it is to end up in a pile of never-ending things to do. Another tip is to send the letter certified. When dealing with accounts and the possibility of a lawsuit, you want to verify they did receive the letter.

Sample Debt Negotiation Letter

Janice Carroll
89 Cincinnati Lane
Arthurdale, WV 26520

March 14, 2019

Gold City Credit Card
2800 San Diego Parkway
San Diego, CA 92120

Subject: Past Due Credit Card Account

Dear Sir or Madam,

I am writing to you about my Gold City MasterCard with account number 5189-0987-4567-3409-1290. As you can see by reviewing your records, this account has falling seriously delinquent. It is my intent to set up an arrangement to pay the past due and make this account current. I want to continue to be a Gold City MasterCard holder and desire to bring my account to a good standing.

Currently my account is four months past due. I was in a car accident in December of last year and this caused me to be off work for more than 6 months. This caused a severe financial deficit in our family budget. However, I have returned to work and am anxious to resolve this matter.

Please contact me as soon as possible to work out a repayment plan. I appreciate your patience and understanding in this matter. I can be reached anytime on my cell phone at 555-908-1239.

Sincerely,

Janice Carroll

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