Debt Settlement Letter

Use this letter when you want to settle a debt with a creditor or collector and maintain a record of your actions.

The term “settle” means you wish to pay less than the balance owed on a debt. Settling debt is often used to reach a compromise with creditors or collectors over a particular debt to avoid or end the litigation. The actual settlement is what both parties have agreed to accept as payment. Use the free sample letter below to compose your debt settlement offer.

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Free Sample Letter Debt Settlement Offer Letter

Today’s Date

Your Name
Home Address
Phone Number

Attention: {name of collector or collection agency}
Address

RE: Collection letter dated {date of letter here} or phone call on {date of call here} reference account #: {account or reference number}

Dear Mr./Ms. {Collector’s or Collection Agency’s Name}

I do not agree that I owe as much as you claim I owe on the above-referenced account.  To save both of us a great deal of time and expense, I am offering to settle this account for $ _______.  

If you accept my offer, please send written confirmation to my address listed above.  Once I receive your written confirmation, I will mail payment to your organization within five business days.  If you wish to discuss this settlement offer, you can reach me at (insert phone number and area code). However, please understand that I will not make any payment until receiving written confirmation that you accept my offer.

Sincerely,

Signature
Your Printed Name

Alternative Text

I do not agree that I owe as much as you claim I owe on the above-referenced account. To save both of us a great deal of time and expense, I am offering to settle this account by making payments in the amount of $ ___________ every month (week, two weeks, etc.)

Send this debt settlement letter via “return receipt requested” and keep a copy for your records.