Knowing what to expect can give you a leg up if you need to negotiate in order to preserve your credit. The worst thing you can do is ignore a debt payment letter. You always want to respond and stay in contact with your creditor. Ignoring the lender’s attempts at contacting you will only make things worse for you in the long run.


Sample Debt Payment Letters

Here is one version of what you may receive from your lender if you have note made your payment as agreed:

Dear Customer,

While we appreciate doing business with you in the past, according to our records, your invoice/payment is now overdue by more than 30 days. Please remit payment by DATE to avoid further collection action. Contact us if you have any questions or would like to discuss this matter. Thank you for your business, and please disregard this letter if you have already sent payment.

Sincerely,

Business Representative

If you don’t respond to a letter similar to this sample debt payment letter, and you do not make your payments, you’re likely to get another one that is harsher in nature, such as this one:

Dear Customer,

Your account is now 60 days past due. We have forwarded your account to a collection agency. If this is in error, please contact us as soon as possible. We regret this action, but we have not received a response from you in a timely manner despite several attempts to contact you.

Keep in mind that not all creditors automatically forward debt to collection agencies once they are 60 days late. The amount of time a creditor will hold on to a debt before forwarding to collections varies.

To avoid receiving a second letter, you can either call the creditor or respond via mail by sending a letter like the following one. Make sure you mail it right away after you receive that first letter.

Dear NAME OF PERSON WHO WROTE YOU:

I acknowledge that I owe your company a debt of AMOUNT and am not trying to dispute it. My concern is that due to current financial difficulties I am unable to repay the amount that you are asking for. Instead, I would like to propose a payment of AMOUNT every two weeks until my debt is repaid. Please call me to confirm receipt and acceptance of these terms or I will consider your deposit of my check a confirmation. If my finances improve in the near future, I will contact you to adjust my payment schedule accordingly. I appreciate your patience and understanding in this matter.


Documentation

Keep records of any contact you have with your creditor. If your creditor agrees to modify your payment plan, ask for documentation and keep copies in your records.

The sender of any kind of debt payment letter, whether he or she is the lender or the consumer, should remember the following:

  • Always be polite.
  • Be honest and direct. You do not want there to be any confusion.
  • Keep detailed records of when you send out your letters. You may need this information in the future.
  • Make a photocopy of every letter after you sign it. Don’t send a letter out without a signature on it.
  • Utilize the telephone as well as letters sent via mail. It’s often the quickest way to reach someone, and you never know when a letter gets lost in the mail or the recipient changes addresses without your being notified.
  • Don’t let the other party take advantage of you. This is not the time to make unreasonable requests, but both parties should be willing to bend a little bit.

If all else fails, see if you can work with a credit counseling service. Sometimes a third party is better at negotiating since the representatives have a lot of experience doing so.

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