Writing a Simple Debt Reduction Request letter (with Samples) Use these sample debt reduction request letters as templates for your formal request letter.
There are many reasons a person may need to reduce their credit card, mortgage, car loan or other debt payments. The most common reason is loss of income because of loss of job or because a spouse lost his or her job resulting in their monthly income being reduced.
A consumer can write a debt reduction request letter to his or her creditor to ask for lower payments for a specified period of time or to ask for a lower interest rate. Whatever the request, the result should be lower monthly payments.
The debt reduction request letter should clearly state that the borrower is fully aware of his or her debt and any interest and fees, and has every intention of paying it. This sends the message to the collection department that the person is responsible and opens the door for cooperation with debt negotiation.
The letter should explain the financial difficulties that have created the problem without sounding complaining. The tone should be matter-of-fact and not include any threats such as the possibility of declaring bankruptcy if help is not given.
The letter should also offer a solution that is fair and reasonable for both the borrower and lender. Most creditors would rather work with a borrower than start extensive debt collection proceedings. However, a letter requesting forgiveness of the debt is not likely to succeed.
Whatever the borrower promises to do in the letter such a search for a job is a commitment towards repaying the loan. They should keep the commitment and honestly pursue any promises made.
The tone of the letter should remain courteous and respectful and explain that the sender would be extremely grateful if his or her payments were reduced for a specified time. The sender may explain that they are unable to make the current payments, but they should not express it in a hostile manner.
If the debt is credit card debt, the borrower may first speak to the credit card customer service representative and ask about payments owed and late fees. Once they know how much they owe, borrowers can determine the amount they can afford to pay each month.
If the customer service representative cannot or will not negotiate the debt, the borrower should ask to speak to a supervisor who may have the power to be more helpful. If the borrower gets no help through a phone call, they should write a debt reduction letter.
If the consumer wants to consult a debt counselor before writing a debt reduction request letter, he or she should make sure the counselor is reputable. A reputable credit counseling agency will give you free information about its services before asking you for any of your personal financial information.
Financial Information First
If an agency asks for your financial information first, it should be considered a warning and the consumer should go elsewhere. Consumers can get a list of approved credit counseling agencies from the United States Trustee Program.
The letter should request that the unpaid debt not be mentioned to a credit agency. If the debt is not paid for 180 days, the creditor may write it off as a loss, but the consumer’s credit report will be drastically lowered, and they will still owe the money.
Below are sample debt reduction request letters. It should be written in formal business letter style and sent by certified mail with a return request. This is the way in which the sender will have proof that the letter was received. The sender should keep a copy of the letter and any other communications connected with the request to reduce debt payments.
Sample 1 - Debt Reduction Request Letter Consumer’s Name Consumer’s Address City, State, Zip Code
Recipient’s Name Recipient’s Address City, State, Zip Code
Dear Name of Recipient,
The purpose of this letter is to formally request a reduction in payments for the medical bills I owe your hospital. I regret that I am unable to pay the bill in full at this time because my monthly income has been greatly reduced after the automobile accident in which I broke both of my legs.
I am requesting a payment plan of $100 per month until the time that I am able to continue working and receiving my usual salary. The rehabilitation may take from six to nine months. At this time, my income is $$$$ and I have a home mortgage of $$$$ to pay. I will pay by check on the 15th of each month beginning DATE.
If this is agreeable to you, kindly send me a letter stating the repayment details as I have described. I can be reached at 555-123-4567 or a [email protected], and I would be happy to talk to you and give you more details at any time.
Sincerely, Signature of Consumer Printed Name of Consumer List of Enclosures
Sample 2 - Debt Reduction Request Letter Name of Borrower Address of Borrower City, State, Zip Code Account Number of Borrower if Applicable
Name of Creditor Name of Lending Institution if Applicable Address of Lender City, State, Zip Code
RE: Debt Reduction Request
Dear Name of Creditor:
This letter is to formally request a reduction in payments on my debt for the next six months. I request to pay AMOUNT starting on DATE and beginning the normal payments on DATE. I have every intention of paying my debt, but am not able to make the usual payments at this time.
I lost my teaching job because of financial cut-backs in my school district. I am well-qualified for teaching biology and hope to have another job within six months. I am looking in two other school districts near where I live.
Because I have every intention of paying my debt, I would like to request that you not give it to a collection agency. I need to maintain my credit rating.
I hope to receive a favorable reply in writing within the next two weeks. If you have any questions or would like any more information about my situation, I can be reached at Phone Number or at Email Address.
Thank you for your kind consideration in my time of difficulty.
Sincerely, Signature of Borrower Printed Name of Borrower
Sample 3 - Debt Reduction Request Letter Name of Consumer Address of Consumer City, State, Zip Code Account Number of Borrower if Applicable
Name of Creditor Name of Company if applicable Address of Creditor City, State, Zip Code
RE: Debt Reduction Request
Dear Name of Creditor:
This letter is a formal request to have my credit card payments reduced for the next six months. I was recently in an automobile accident through no fault of my own and sustained injury to my neck. Because of this I lost my job and have used my savings to help pay medical bills. The insurance will pay the majority of the bills, but I still have no income. My wife is still working, but her salary is not enough to meet our monthly expenses as well as pay down our credit card debt.
I would be able to pay half of the monthly amount AMOUNT for the next six months at which time I hope to be back to work. I would not like my misfortune to cause my credit rating to drop as I am willing to pay all of my debts if I could have a reduced payment of AMOUNT starting on DATE and ending with the last reduced payment on DATE.
My wife and I are moving in with my parents for a few months to save money. My previous boss has promised me my old job back as soon as I am able to work. I have enclosed copies of my medical bills and doctor’s report about my injury.
Please call me at your earliest convenience to discuss this matter. I recognize the importance of paying all of my debts and have every intension of doing so. I can be reached at Phone Number or at Email Address.
Thank you for your consideration of this matter.
Sincerely, Signature of Consumer Printed Name of Consumer List of Enclosures: Copies of Medical Bills and Doctor’s Report
Sample 4 - Debt Reduction Request Letter Consumer’s Name Consumer’s Address City, State, Zip Code
Creditor's Name Creditor’s Address City, State, Zip Code
RE: Debt Reduction Request
To Whom it may Concern:
This letter is a formal debt reduction request. Due to an automobile accident in which I was severely injured, I was not able to attend my job and have since been fired. Because of this, I have not been making regular monthly payments on my Name of Company credit card debt. When I am well, I will continue to work, so I would prefer not to apply for bankruptcy at this time and would like to work out an agreement with you for settling the debt.
Because my finances are in such bad shape, I am asking that my account be closed. I would like the interest charges, both accrued and future, be waived and a plan for monthly payments considered for the rest of the debt. I can offer AMOUNT every month to repay AMOUNT that is the current balance owed. I hope we can agree on a monthly payment that is suitable for us both.
I would also like to request that my account be shown as current and that all of the negative listings related to my account be deleted from the three major credit bureaus: Experian, Equifax and TransUnion.
I have enclosed a debt settlement agreement that you can sign and return to me if you are agreeable to the terms I have proposed. Please contact me by phone at 555-123-4567, email [email protected] or by letter to discuss the new monthly payment amount. I hope that we can agree on terms that will allow me to close this account and avoid bankruptcy because this is my best effort to repay you part of the balance owed.
Thank you for your time and consideration in this matter.
Sincerely, Consumer’s Signature Consumer’s Name Printed List of Enclosures By Andre Bradley