How To Write Letter To Creditors – A Debt Settlement Offer Letter is a form that shows that a debt is willing to be settled if the parties agree to new terms. Usually, this letter is from the debtor to offer a lump sum payment if the creditor is willing to release the burden of the full amount. After accepting the letter, the parties will enter into a debt settlement agreement, unless a simple receipt is sufficient to satisfy the debtor.
Sample DEBT SETTLEMENT OFFER LETTER John Doe 123 Apple Way Appleville, CA 06831 Dated December 15, 2017 RE: Collection Letter Received December 1, 2017 Dear Jefferson Collection Agency, This letter does not grant me the acceptance of the money owed to me provides an offer in which I would be willing to pay to remove this claim. The amount I am willing to offer is Six Hundred Eighty Dollars ($680.00). If you accept my offer, payment would be made immediately. Please feel free to contact me through the contact information provided: Email: [email protected] Cell: (813) 732-4741 Sincerely, John Doe Video
How To Write Letter To Creditors
The letter template shown on this page can be downloaded as Adobe PDF, Microsoft Word (.docx), or Open Document Text (.odt). Three labeled buttons have been provided to this page, so you can access a copy at your discretion.
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The first task will be to address the three blank lines on the right half of the page just below the Title. The sender of this letter should fill in their full name on the first line, then use the next two lines to record their mailing address.
The following blank space is reserved for the Date of this Letter. Be sure to enter the current date in the traditional Month Name, two-digit Day, and four-digit Calendar Year.
Most of the language in this letter is structured appropriately to offer the debtor a settlement, however, the amount of money offered by the sender must be recorded so that the sender’s intentions can be settled. Write how much money the consignor is willing to pay the debtor on the blank line after the words “…I am willing to offer is” and use the blank line in parentheses to record the dollar amount the consignor is willing to pay as number
Locate the set of blank lines below the body of this letter. The sender of this letter should use these lines to document their current “e-mail” address in the first.
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The total of any debt in the United States is $14.96 trillion. According to Ramsay Solutions, this is an average of $158,209 per household. Home loans make up the majority of debt, followed by student loans, then auto loans, and finally credit card debt. There are other costs as well, but these are the most common.
Of course, people can manage them by making consistent payments to the organization they owe. For example, homeowners make monthly mortgage payments to their lenders.
These bills become problematic when the borrower fails to make a payment or stops making them altogether. No one wants to end up in that situation, but the reality is that it can be difficult to keep up with too many payments. This results in a quarter of Americans not paying their bills on time.
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Enter: debt collectors. If you are reading this blog, you probably know what these people do. You can even be one yourself.
But just in case you stumbled here looking for the definition, let me summarize. Debt collectors do exactly what it sounds like… collect debts. If a borrower does not pay their bill, then the debt collector buys these overdue payments from the company or creditor. Then they try to collect what the person owes.
For this, they send debt collection letters. Simply put, these remind an individual that they owe money. The goal is for the person to finally pay, especially now that their bill is in the hands of a collection agency. After all, no one wants to deal with any potential legal action.
I’m sure you can agree. Even as a debt collector, you don’t want to deal with potential lawsuits. But how do you get people to pay before it gets to that point?
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Writing an effective yet ethical letter is the first step in starting this process. You may be wondering what exactly I mean by “ethics”. It’s more than just writing a polite letter. As a debt collector, there are legal requirements you must follow.
If I had to guess, most people aren’t missing their payments simply because they don’t feel like paying. A more likely reason is that they have financial difficulties that make it impossible to pay. Because it’s a sensitive situation, the government offers protection to people when it comes to collection agencies’ attempts to get their money.
The Fair Debt Collection Practices Act protects individuals from inappropriate and abusive behavior by debt collectors. This law states that collectors cannot…
There is a 2009 movie called Confessions of a Shopaholic. The main character, Rebecca Bloomwood, owes a debt collector thousands of dollars. The collector, Derek Smeath, breaks many of these rules. He stalks her by repeatedly calling her personal and work phone, and shows up at her apartment and workplace.
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In one scene, Bloomwood is a guest on a live television talk show. She doesn’t know that Smeath is in the audience. When the talk show host asks questions from the audience, he exposes Bloomwood’s debts in front of the entire audience and on live television.
Of course, the movie is a comedy so they don’t focus on how she was breaking so many rules that the FDCPA would protect her from. But it is a good example of what the collection agencies
So now that you know the ethics behind contacting those who owe money, here are four effective examples of debt collection letters that you can use.
Chances are people already know they owe money as they would have received a bill before it was due. Although, they may not know what the time frame is before this transfer takes place.
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The amount of time it takes for an account to go into collection varies by lender, creditor, and even by state. For example, Georgia’s foreclosure process period is only 37 days, while New York’s can take up to 445 days. That difference is significant: just over a month, compared to well over a year.
Auto loan repayments usually start at 60 days. Credit cards, on the other hand, usually go to an internal collection department before going to a formal collection agency.
This is why you need to send an initial letter stating that you are now responsible for collecting the payment.
The sample above includes a space for the agency to indicate who it is collecting on behalf of. This way, the person who owes knows why they are receiving the letter. By including the amount, due date, and instructions to pay, this person knows how to settle their balance without facing the listed penalty.
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It is a requirement that debt collectors send a validation letter within five days of first contacting an individual. These will likely include some of the same information as the initial debt collection letter example in the previous section.
However, there are a few more details that must be included to qualify as a validation letter. By law, they must indicate…
Depending on how you structure the first letter you use to contact a person, you may not need to send a separate validation letter. As long as the initial includes the details required by law, you’re all set.
You are more likely to end up sending a letter specifically for this reason if you contact the person by phone first. Since they do not yet have the information in writing when you call, you must send it within five days.
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As I mentioned before, one reason many debts go unpaid is due to financial difficulties. For example, more than 25% of Americans struggle to pay their medical bills. And more than half of those people have no other debt besides these medical bills.
Due to financial challenges, payment plans are a useful way for both the person who owes and the organization that is collecting. Because the person has avoided paying their bill for so long, they may not yet have the money by the time it comes to collect.
Offering them a way to make payments in increments helps them reduce their debts over time. Of course, it may not be the full amount they owe you. But a little is better than nothing, you’ll eventually get paid in full and it’s not as complicated as going to court.
These plans will also help relieve
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