How To Settle Your Credit Card Debt With A Debt Settlement Letter

By Author: J.J. Yong
Total Articles: 962
Comment this article

When you have accumulated a big sum of outstanding balances on your credit card statement, you are reminded to find a way out immediately. One of the useful strategies you should take is working out a debt settlement plan. In general, since this type of debt is considered an unsecured debt, you can actually handle it on your own by writing settlement letters to your creditors without obtaining assistance from any settlement service provider.

There are 4 key steps you should take when you are communicating with your creditors through formal proposals.

1st Step:

Before putting your proposal into words, you are advised to form a proper debt settlement strategy. You need to bear in mind that most of the credit card providers would prefer if their debtors are able to make one single payment to them to settle their outstanding balances. The best time to write a settlement letter is when you have not made any payment at all for more than 3 months. In order to stand a higher chance to settle your debt successfully, you must avoid yourself from proposing multiple payments.

2nd Step:

When ...
... you are sending letter to your creditors, you are required to do some homework. It is important for you to find out the information about the "recipient". The letter should be addressed to someone with the authority to make decisions. You can find out the name of the person by calling the creditors to find out.

3rd Step:

Start writing the letter by informing your creditors about your current financial constraints. Propose a settlement amount which you can afford to pay. In common, the amount proposed should be 40%-60% of the total debts.

4th Step:

You need to be clear about all the related terms. State the date of payment clearly and how the payment is made. Request your creditor to remove all your negative entries on your credit report.

Finally, send the letter by registered mail and wait for the reply from your creditors. If your proposal sounds acceptable, your creditors will accept your offer and send you a written reply. However, most of the time, the creditors may counter offer you with their own settlement plan. You are required to renegotiate with them until both parties agree with the deal. Before you send in your payment, you are reminded to make sure that you have received a black and white letter detailing exactly how and how much the debt will be settled.
or more information about debt settlement letter and debt settlement companies, visit DebtSettlementPoint.com.