1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will term you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair Isaac).

2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% - 30%!

3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have atleast 2 credit cards and 14% of them have 10 or more credit cards.

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Debt Payment Settlement Letter

When you cannot 100% meet the payment demands of your creditors, use this letter to try to negotiate a lower monthly payment. For example, if you owe $15,000 in credit card debt totalling the monthly payments to be $550, you can use this letter to try to negotiate a lower monthly payment with your creditors.

Click here to get an MS Word format version of this letter. A .doc file will open up and save it to your Desktop. This way you can easily retrieve the file.

Today's Date (dd-mm-yyyy)

Your Name
Your Address

Debt Collector's Name
Debt Collector's Address

RE: (Account # of Debt Owed, Customer Name & Type of Debt)

Mr/Mrs. Debt Collector,

Having received your (letter or phone call) dated (dd-mm-yyyy), I acknowledge that I owe $____ in debt to your company. I am not disputing this debt, but my current financial situation does not allow me to pay the monthly payments that you are asking for. I however can make payments of $____ at the beginning of every month, starting (dd-mm-yyyy).

I would really appreciate if you reply to this letter and confirm acceptance of my above payment terms. I have also enclosed my first payment in paper check. If i do not receive a reply from you and you cash in my check, I will assume you accept my above mentioned payment terms. If you do NOT accept my payment terms above, please return my enclosed payment check in the self-addressed stamped envelope.

I am not a chicken to run away from my debts. This is why I am contacting you with this letter. Thank you for your understanding.

Sincerely,

(Your Signature)
(Your Printed Name)