Writing Debt Settlement LettersWritten by Jill Morrison
For many, paying off credit card debt becomes an overwhelming burden. Writing debt settlement letters is an option which is relatively unknown. A debtor may write to a creditor and offer a settlement of less than the amount owed. In many cases, the creditor will accept the offer or make a counter offer. This often enables the debtor to settle the account for an amount he can afford.
Advice on Writing Debt Settlement Letters
A person with debt problems may choose to write his own settlement letters or he may work through a debt settlement company. Sample letters are available online that give a general idea of information to be included. Usually, a debtor will offer a dollar amount as payment in full. He will offer to mail the full payment as soon as he receives confirmation that the offer has been accepted. Often, it takes several letters before a settlement is reached.
Debt settlement companies have expert knowledge that could make a difference in the outcome of a settlement offer. They can offer advice about legal and tax implications of settling a debt. For instance, the difference between the original dollar amount and the settlement amount is considered income by the Internal Revenue Service. Settlement companies will also advise about the danger of being sued when writing settlement letters.
Debtors must have funds available for immediate payment if a settlement letter is accepted. Settlement service companies offer payment plans that will settle all debts quickly in exchange for a new loan with one manageable payment. This helps to begin repairing a damaged credit record before paying what is owed. Counseling services are offered which can be very helpful in easing stress.