Things That You Shouldn't Include In Your Debt Settlement Proposal

By Author: J.J. Yong
Total Articles: 963
Comment this article

Many people totally have no idea on how to prepare debt settlement proposal. It is not writing an essay or telling a story about how tight your budget is. It is a formal letter to request your creditor to reduce your total debt so that you can pay off the outstanding balance in a faster and easier way during economy hard times.

When you are communicating with your creditor in writing, there are a few key points you need to bear in mind. Since you are putting your request in black and white, you have to be extra careful that some items should be avoided in the proposal.

Firstly, before you make your decision to settle your debt, it is very important for you to make sure that you have sufficient fund in your account to negotiate for settlement. If you don't have any cash on hand, just forget about settlement! This financial solution is totally not your choice. You don't even need to draft a debt reduction letter. If you only have a little fund on hand, you are also not encouraged to propose to make multiple payments to your creditor by installment. By doing so, you will normally at the losing side.

Secondly, ...
... when you are putting in your settlement amount, you are reminded not to propose it at 70-80% of your total debt. If you propose to pay so much, you would totally have no more space to negotiate for better deal. In fact, you should generally make an offer to pay approximately 30-50% of what you owe.

Thirdly, bear in mind that you are writing a proposal but not a threatening letter. Never threaten your creditor that you will not pay off your debt if they don't agree with your proposal. If you really have the intention to file bankruptcy, just state your intention in your letter. You should still show your sincerity in settling your debt.

There are smart techniques in writing debt settlement proposal. If you have never written an official letter, make sure you get assistance from consultant or some experienced people.
For more information about debt settlement letter and debt settlement companies, visit DebtSettlementEssentials.com.