Debt negotiation letters are to be written during the final stages of a debt negotiation. They are superior to haggling over the phone because they provide a document of any communication or proposed transaction between you and bill collectors. Writing a negotiation letter should be done with the assistance of a non-profit debt relief service.
Investigate your debt collectors
You will want to know what fees and costs are associated with ending the debt negotiation process. Essentially, you want to know all the conditions of your deal from day one. If you find any inconsistencies, raise questions over these in your letter. You force collectors to correct ‘mistakes’ and miscalculations if they have to put it in writing.
Tally up your finances and present the whole picture
Demonstrate in the letter that you are insolvent and simply will not be able to pay back your outstanding debts in the near future. If your financial picture is chaos, bill collectors will be less optimistic about collecting in full. Include your incoming and outgoing household expenses in a spreadsheet to further your case.
Have your settlement money on had
Be ready with 70% or 80% of the money you owe. If you have established a savings trust with a debt relief service, you should be able to save until you have this lump sum to negotiate with.
Do not send this money with the letter. This money is for you to bargain with. You want to be reasonable with your offer, but lowball the collection agency. They will return with a counteroffer, and you want to have discretionary cash to meet that offer.
Most importantly, keep everything in writing. If they agree to a settlement, get a receipt and an annotated response that details your settlement and the terms of your settlement.