Debt Consolidation Loan Request Letter

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Debt Consolidation Loan Request Letter

Debt settlement is when a debtor negotiates a lower payment amount than the full amount due. The reduced amount must be agreed to by the creditor or collection agency. This must be recorded in writing. The settlement may be given in one lump sum, but it can also be divided over time.

While creditors are not legally required to accept settlement proposals, many people are unaware of the fact that it is possible to negotiate and pay lower amounts to settle debts. 

If you want to settle your debts on your own, contacting creditors with a well-written debt settlement proposal letter is a must. United Settlement’s debt settlement experts can help you draft a successful letter of proposal for debt settlement.

How to write a proposal letter for debt settlement

A successful debt settlement agreement can save you thousands of dollars and reduce the stress associated with debt and the monthly payment process. There is so much riding on a successful negotiation. You want to make sure that things get off to a great start and to build momentum towards a stress-free and money-saving settlement.

It’s important to clearly state your expectations when you make a final settlement offer to creditors. It is also important to tell the creditor about your current circumstances, including work-related, health-related and family-related. 

Also, explain how these affect your cash flow, necessary expenditures and your ability to repay the debt fully. Your creditor will be able to access your account if you have declared your intention to settle the matter in writing. 

Your full name, address, account number and all other identifying numbers that are connected to your account (including those related with collection efforts) should be included.

Before transferring money to the creditor, confirm that the creditor has accepted your debt settlement offer. A written acceptance of the offer will be sufficient to confirm that there have been no further disagreements. 

You should also realize that a negotiated settlement of debt means that you will have paid less than the full amount of the debt. The settled account will be listed on your credit report as “settled” rather than “paid in whole.” 

However, you can request that your account be marked “paid in full” on credit reports. Settled accounts will remain on your credit report for seven year and can have a negative impact on credit scores and profiles.

Debt Settlement Proposal Letter Example

Your letter of proposal for debt settlement should look professional. It should include your name, full mailing address, blank lines, your account number, and the date.

Another blank line will contain the complete creditor organization’s name and address. You can begin writing the actual content of your debt settlement proposal letter after another blank line.

 

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