Terminating Your Debts or Official Refusal to Pay Letter

Sometimes after settling your debts with your creditors at a certain lower monthly payment, they will demand higher payments or even the entire balance! Use the following debt termination letter to let a creditor know that you cannot afford to pay the higher balance that they are asking you to pay, but are however committed to make regular on-time monthly payments at a lower rate. This letter also informs the creditor that if they cannot accept your offer of a lower on-time monthly payment, you will have to terminate your relationship with them and halt all further payments.

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,

I have made regular on-time monthly payments on the above referenced debt since our initial debt negotiation date ____ (dd-mm-yyyy). According to my records, I have made __## payments of _____$ each leaving a principal balance of $_____.

I would love to make monthly payments on this debt and pay it off as soon as I can. However, I cannot afford the new higher monthly payment that you are demanding. Unless you agree to continue receiving my lower monthly payments, I will be forced to terminate our relationship. Since I am officially contacting you to settle this debt at a lower rate or terminate our relationship, you can now contact me under 2 circumstances only:

  • To inform me that you accept my original offer of the lower monthly payment $$___/month
  • You intend to pursue my case in court or are taking legal action against me.

If you do decide to pursue this case in court, be aware that I have maintained detailed records of our financial relationship and have made every effort to make regular on-time payments. However, I simply cannot afford the new higher monthly payment that you are demanding. The judge will decipher this and know that I have acted in good faith in this relationship, and will rule the case in my favour.

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.


(Your Signature)
(Your Printed Name)