Are you in a fix of how to inform the credit card company about your inability to pay off the debt? Writing a settlement letter for the same would be the most appropriate thing to do. Read the following article to learn about how to draft one.
Are you in a position where you have an outstanding balance on your credit card, and due to a financial crunch or other circumstantial reasons, you are now unable to pay it off in full? Well, there is a way of resolving this issue: to negotiate it for a viable amount. But, don’t even think of stopping the payment without notifying to the credit card company. This would only lead to legal consequences. Besides this, you will also be blacklisted by the banks. To avoid this, one must follow proper procedures, and in case of negotiating for a certain amount, writing a debt settlement letter is the most appropriate and effective way of saving yourself from trouble. Settling this is not so difficult, as long as you carefully follow the right procedures.
With the help of a template illustrated in this article, you can learn about writing this letter. After all, writing it is anytime better than filing for a bankruptcy. So, spare some time; letter writing is all that you need to do to avoid all the possible complications in the future.
Provided below is a settlement letter in a structured format. The information on what is to be included is specifically given in the form of a template to provide you with a better understanding of its essentials.
Credit Card Number
Name of the Card Issuer
Salutation: Dear (Name of the Card Issuer),
First Paragraph: Introduce yourself and provide the account details, including account number, the current interest rate, and the total outstanding balance (only stating the account number here would just be fine), so that the reader can relate to the intentions behind writing it.
Second Paragraph: In this paragraph, inform the card issuer that you intend to settle the debt on the mentioned credit card. Explain your financial situation and the reason for settling the outstanding balance.
Third Paragraph: Once you have explained your financial situation and the reasons for it, state the settlement amount that you can manage to pay. Also, mention the specific date by when you can start making the payment, once you get the consent from the creditor. The mode of payment, and whether it will be paid in full or in installments also need to be stated in this paragraph.
Fourth Paragraph: To protect yourself from any financial risks in the future, state the terms of payment clearly in this paragraph. Clearly mention that the creditor in your credit file must declare your debt as paid in full. Also, state that the payment will only be made after getting a written confirmation from the creditor, stating that they agree on this settlement.
Conclusion: Conclude the letter with a polite request to your creditor to consider your problem and to understand your financial condition that requires urgent attention.
An important point to remember while writing it is that you need to maintain a professional and sincere tone. As this is a business letter, the writing etiquette must be followed. Remember, it is a form of request, and hence, it should be made in a polite way. You are bound to pay the outstanding amount in full; however, remember that you are requesting the creditor to consider your case as you are not in a position to make full payment.