Debt Settlement Offer Letter
Offer a lump sum to settle a debt for less than owed.
When to Use This Template
Use this when you have some cash available and want to negotiate paying less than the full balance. Creditors sometimes accept less than the full balance, especially on older debts; the discount depends on the creditor, the age of the debt, and whether you can pay a lump sum. Always get the agreement in writing before paying.
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[Your Full Name]
[Your Address]
[City, State ZIP]
[Date]
[Creditor or Collection Agency Name]
Attn: [Department or Contact Name]
[Recipient Address]
[City, State ZIP]
Sent via Certified Mail, Return Receipt Requested
RE: Settlement Offer, Account No. [Account Number], Original Creditor: [Original Creditor Name]
Dear [Recipient Name]:
I am writing regarding the above-referenced account, which your records show carries a balance of approximately [Current Balance]. Due to a sustained financial hardship that began on [Date Hardship Began], I am unable to pay this balance in full. However, I want to resolve this debt, and I am prepared to offer a lump-sum settlement of [Settlement Offer Amount], which represents approximately [Percentage of Balance] of the stated balance, as payment in full.
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Important Disclaimer
This template is provided for informational and educational purposes only and does not constitute legal, financial, medical, or professional advice. Every situation is unique. You should consult with a qualified attorney or licensed professional before sending any formal correspondence, especially for matters involving legal rights, government agencies, financial disputes, employment issues, or family court proceedings. Use of this template does not create an attorney-client or professional-client relationship. Formal Letter Templates is not a law firm and does not provide legal services.