Are you good at business writing? Do you know what a credit card debt settlement letter is? It is actually a proposal written by a debtor to his or her creditor to request for debt reduction due to the disability of paying off the total debt. In this letter, the debtor usually offers to pay only a fraction of the total outstanding to the creditor.

The debtor is forced to make this payment arrangement because he or she is suffering from unavoidable financial difficulties. The main purpose of writing this letter is to assist the people in debt to get rid of their outstanding balances without declaring bankruptcies.

Here is the structure of a perfect settlement letter:

First Paragraph: Be precise

Start writing the letter by including your full name, address, contact information and your debt details. Make sure you write your account number, total outstanding balance and current interest rate clearly.

Second Paragraph: Be straightforward

Inform your credit card provider that you want to settle your debt. Give a brief explanation about why you need to settle your outstanding balance. State the difficulties you are facing in a sincere manner. It can be due to unemployment, loss of income, unexpected medical expenses, family hardship, and so on. If you have supporting documents which can be used as proofs, you are suggested to attach them with the letter.

Third Paragraph: Be specific
After explaining your financial situation, you should then inform your creditor the settlement amount you can afford to pay. In other words, you can state the debt amount you wish to be forgiven. Normally, the settlement amount proposed is 40%-60% of your total debt. At the same time, state clearly when you can begin making the payment if consent is given by the creditor. Besides, mention clearly how the payment is made, either in one lump sum or by installment.

Fourth Paragraph: Be strict

Before you come to the conclusion, you are reminded to set a condition to your creditor. You MUST state the terms carefully in order to protect yourself from any financial risk. You need to state clearly that your creditor should report your debt as “paid in full” on your credit file. Set the condition that you will only make payment after getting the assurance from your creditor in written form.

Fifth Paragraph: Be courteous

Always end your letter in a polite manner. Request an urgent attention from your creditor to look into your problem. It is always better to settle your debt as soon as possible because you need time to rebuild your credit.

For people who seldom write business letter, by following the step by step guide above, you will be able to produce a sound proposal which can lead you to a successful settlement. Credit card debt is your financial obligation. Don’t try to avoid it. Use the tactful way to overcome your problem. Be frank, writing settlement letter is 10 times better than filing bankruptcy.