Reasons To Consolidate

Stop Collection Calls
Lower Monthly Bills
Free Credit Counselors
Repair Your Credit
Get Out of Debt For Good
Foreclosure Facts
Loan Modification
Debt Elimination
Debt Settlement
Debt Negotiation
Personal Debt Freedom
Debt Management Plans
Debt Consolidation Guide
5 Steps To Debt Relief
Types of Debt Relief
Tips To Reduce Debt
Understanding Tax Debt
Payday Loan Relief
Debt Negotiation Letter
Debt Verification Letter
Credit Card Help
Credit Card Rules Changes
Store Credit Cards
Fix Credit Card Debt
Debt Consolidation Loans
How Debt Consolidation Affects Credit
Free Bill Consolidation?
Reduce Your Debt
The Debt Snowball
Financial Planners
Medical Debt Guide
Seniors in Debt
How to Keep Your Job
What if You Don't Pay Bills
Wage Garnishment
Mortgage Hardship Letter
Get Out of Debt
Bad Credit Personal Loan
Life After Bankruptcy

What is a debt payment negotiation letter?

You start off with a few small, manageable debts. Then you lose your job or get sick. Suddenly, the bills start to get out of control. You can no longer keep up with the monthly payments. What do you do?

One option is to negotiate with your creditors. You may be surprised by how open then can be to negotiation. After all, they don’t want you to go bankrupt any more than you do. They would rather have some of their money back, than none at all. Therefore, they may agree to reduce what you owe to an amount that is acceptable to both parties.

You can hire a lawyer to do the negotiation for you. The cheaper alternative is to go the do-it-yourself route.


A sample debt negotiation letter

You can use this sample letter to negotiate with your creditors.

Your Name
City, State, Zip code


Creditor’s Name
City, State, Zip code


Reference: Account number

Dear Sir or Madam,

I am writing with regard to account number [#]. I received your bill dated [date]. I acknowledge that I owe you a total of $___. I am not disputing this amount. However, in my present financial situation, I cannot afford to make the payments that are required of me. Any attempt to do so would result in my filing for bankruptcy and, consequently, defaulting on the remainder of this debt.

While I cannot make the payments listed on the bill, I can pay you $___ per month for the next [#] months, equalling a total of $___.

I am enclosing a check for $___ for the first payment.

Please reply to this letter to confirm that you agree to the payment schedule outlined above. If you do not agree, please return the check to the address listed at the top of this letter. If you do not reply and subsequently cash the check, I will assume that you have agreed to my payment proposal.

I have no desire to intentionally default on this debt. I appreciate your understanding of my current financial situation.



Your Name

Things to add to your debt negotiation letter

You can improve your chances of being successful at debt negotiation by clearly explaining your current situation. You may want to include things like:

  • Your financial circumstances
  • Your employment status
  • Any medical issues
  • Any family issues
  • Anything else that has affected your ability to pay your debts (e.g. a natural disaster, a house fire, a car accident, etc.)

Tips for negotiating with your creditors

Before you begin negotiating with your creditors, find out the exact amount you owe. Don’t forget to include any fees and interest. Then calculate how much you can afford to pay each month. Be realistic. The lenders will not forgive all of your debt, or even a majority of it. They will only forgive that which they feel they have no chance of collecting from you. If you can pay a chunk of the debt upfront, do so.

Negotiate in writing, rather than over the phone, and keep copies of all the correspondences. You can use the letter above, modifying it to fit your personal situation.


If the creditors agree to clear some of your debt, make sure that this is reflected on your credit report.

Related Articles:

  • Composing a Letter to Stop 3rd Party Collection Calls
  • Debt Verification Letter: Free Sample/Template
  • Bill Consolidation : Consolidate Bills : Bill Consolidation Loans
  • Sample Letter for Mortgage Hardship, Loan Modification
  • Sample Debt Letter Requesting Bank to Lower

  • Contact Us | Privacy Policy | Terms of Use | Site Map