Writing a Debt Settlement Counter Offer Letter (with Sample) Use this sample debt settlement counter offer letter as a template for your formal counter offer letter. Last updated on November 26, 2020
If a creditor is willing to negotiate with a borrower for a lower amount in order to have a debt paid off, the creditor may send a debt settlement offer to the borrower.
This settlement amount may still be more than the borrower can pay due to circumstances beyond his or her control. If this is the case, the borrower may send a debt settlement counter offer of a lower amount. The letter should explain the reason the borrower cannot pay the amount offered by the creditor.
Half the Money Owed
In general, debt settlement is usually about half of the total amount of money owed. If the original debt settlement offer from the creditor was less than this, the borrower may want to send a counter offer that is about half of what he or she owes. This amount has a good chance of being accepted by the creditor because it is still within the usually acceptable limit.
There are several legitimate reason a person may not be able to pay the debts he or she owes. If the borrower wants to reduce the amount required to pay off a debt, he or she must have a genuine hardship. The hardship is usually a time of distress that has affected the person’s finances.
Some, but not all, of the legitimate reason for hardship are:
Loss of job or spouses loss of job
Death of spouse
Property damage due to a natural disaster
The borrower should remember that he or she is not entitled to have their debt reduced. It is up to the creditor whether they are willing to negotiate. This is why it is important for the borrower to always be courteous and polite and have a genuine reason for financial difficulty.
If the counter offer letter is arrogant in tone or too full of misery, the creditor may not take it seriously and think that the borrower is just trying to pay as little as possible. It should be professional and accurate.
Debt Settlement Offer
When creditors make a debt settlement offer, they have decided to accept a lower amount. When making a counter offer, the borrower should be absolutely sure they cannot meet the offer given. When a counter offer is made, it voids the original offer.
The creditor could withdraw the original debt settlement offer and require the borrower to pay the debt in full. Because of this, the debt settlement counter offer should be supported by relevant statistics.
Creditors often think that debts that are long overdue will not be paid. This means they either need to forget the debt or they need to give it to a collection agency. They may want to take the borrower to court. These actions are expensive for the creditor, so if he or she believes the borrower sincerely wants to make some payment on their debt, the creditor will usually accept it.
Debt Settlement Counter Offer Letter Sample Below is a sample debt settlement counter offer letter. It is a professional document and should be written in formal business-letter style. The borrower can send it by certified mail with a return requested. All correspondence connected to the borrower’s attempt at getting a debt settlement should be saved. Any documents sent, such as medical reports, should be copies. No original documents should be sent.
Debt Settlement Counter Offer Letter Sample Sender’s Name Sender’s Address City, State, Zip Code
Name of Lender Address of Lender City, State, Zip Code
RE: Counter offer to settle debt for ACCOUNT NUMBER
Dear Creditor’s Name:
This letter is a formal counter offer to settle my debt with your company. I received your settlement offer of AMOUNT on DATE, and appreciate the fact that you are willing to work with me to settle my debt so that I can pay it off. However, it would be financially difficult for me to pay the amount you offered because my wife is ill and we have lost her income.
I am requesting that you accept my counter offer of AMOUNT to be paid in one lump sum. I also have several other debts to pay off. I have enclosed a copy of her medical report. I request that you remove any late fees and when the amount is paid, and that you remove the debt from my credit report.
I have enclosed a signed copy of this letter. If you agree with my counter offer, please sign the enclosed copy and return it to me. When I receive it, I will send the full amount of AMOUNT to you within five working days. If you have any questions, I can be reached at Email Address or at Phone Number.
Thank you for your kind consideration of my counter offer.
Signature of Sender Printed Name of Sender List of Enclosures: Signed copy of this letter, copy of wife’s medical records