To write a settlement offer letter, explain the reason for any financial hardships that might have resulted in the debt, then make a clear offer to settle the debt for a specific amount of money, including when it will be paid and whether the author is requesting a payment schedule. A settlement offer letter is a communication written to a creditor offering a lesser amount of money to settle the debt because of a financial hardship or other extenuating circumstance.
A settlement offer letter should be short and concise and should not offer any personal information that the creditor does not need to know in order to make a decision.
Step 1: Explain the financial hardship
If the debtor has experienced a financial hardship, such as the loss of employment or unexpected medical bills, he or she should succinctly explain those circumstances and how they relate to the debt.
Step 2: Make the settlement offer
The second portion of the letter should make a settlement offer using an exact dollar figure, such as $2,000. If the debtor needs to pay the settlement over a period of time, he or she should specific the proposed terms, such as, "I will pay $2,000 total in $400 payments during the course of 5 months, with each $400 payment made by the first day of the month." This leaves no room for misunderstandings.
Step 3: Ask the creditor to respond
At the end of the letter, the debtor should ask the creditor to respond in a specific format, such as by return letter or phone call. Thank the creditor for their time, then specify that you want the settlement to include the removal of the delinquency from the debtor's credit report.