Debt Settlement Letter
Debt settlement letters are very important because they set terms to help you rid yourself of debt. They’re a binding contract and can help fix your credit rating if done correctly. There are a number of things that should always be included in one of these letters to make sure you aren’t setting yourself up for trouble. Here’s an overview of what you need to include along with a sample letter.
Since the global economy crisis last year, millions of Americans have been struggling hard to look for ways to rescue their credit score. One of the solutions they take is writing to the creditors to seek for approval to reduce their outstanding balances. Does this settlement letter contain legal effect? This answer is “Yes”.
Before you attempt to write a settlement letter, request debt validation from the lender to find out exactly how much you owe. Then research all applicable terms and conditions of the credit card such as the interest rates and fees.
Decide how much you are willing to pay to settle the debt. Most lenders will accept up to 60% of the outstanding debt. Since many creditors will reject your initial offer, offer an amount lower than what you are willing to settle for. In this case be prepared to make a counter offer.
Determine who your creditors are. Firstly you need to know clearly who you owe the money to. To get the name of the creditors right is the most important point to take note here. Just to think that if you write the wrong creditor’s name, it’s just like you pay the cheque to the wrong payee or giving the things which should belong to you to somebody else. Undeniably you will be vexed on this and please be aware on this money sensitive issue.
To receive the success needed from a debt settlement letter; the first thing to learn is how to write an effective letter in a convincing yet professional manner. Before sending out a letter, it is recommended to look at all the pros and cons of the debt negotiation. Anything that is written about the debt settlement must be stated very clearly.
By writing formally to the creditors, you are able to make your main point very clear, i.e. paying off your debt in one lump sum without affecting your credit rating. The letter serves as a proof to show your intention to solve your credit problems sincerely.
Going into the content, explain on your previous and current financial situations, and what s the reason of you falling into debt. Also input details such as your total debt amount and it is advisable for you to give a feasible solution to service your debt.
Secondly, if you really feel unsecured to get information from internet, you are recommended to consult a reliable financial consultant. You can draft the letter on your own but you should get legal advice from this consultant.
By the way, by researching and comparing the best debt settlement services in the market, you will be able to determine the one that meets your specific financial situation. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned debt advisor and money by getting better results in a shorter span of time.