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Offer to pay debt in installments letter

If you are serious about improving your credit and removing your debt, one way you can start chipping away at it is to pay in installments.  This shows them that you are doing what you can and you really intend to get rid of your debt owed.  The best way to approach this is by writing a letter to your creditor and explaining why you want to pay in installments and how it will benefit both of you.  There are templates you can use to write a letter to your creditors but in this post we will cover what should be in the letter.

The first thing to remember is that reaching out to creditors in this way is much better than avoiding them altogether.  You will be filed in the ‘take this guy seriously’ folder instead of the ‘bone breaker debt collector’ folder.  By reaching out with a professionally written letter you have the opportunity to have a voice and actually be taken seriously.  Besides, what is the worst case scenario?  They deny your request and you are right where you left off?  In the eyes of a creditor someone who reaches out to them is more trust worthy than those who ignore them.

The contents of your letter do not need to be over written and complicated.  In fact it should be quite simple.  The people you are writing to are very busy and most likely want you to get right to the point; they will appreciate you for doing so.  Make sure to leave out details that are not essential to your letter. Be humble in your letter but do not seem desperate.  Write with a confident attitude that you intend to get this debt paid off.  Using a template will help you follow the right steps and be professional at the same time instead of writing it on a piece of torn out notebook paper.

Make sure to mention the details of your debt such as the terms, balance etc.  This way, creditors know you are proactive about your account and also there will be no confusion in the future.  This is a chance for the creditor to look at the terms and dispute any differences they may have.  This is very important to do before you start paying on your installment plan.  This will act as another form of written confirmation and keeps you on the same page as your creditor.  If you do not know all the details of your loan make sure to find them before writing your letter.

Use documentation to emphasize your letter.  Attach documents of income or lack thereof and provide explanation.  Talk about how you are willing to pay what you can afford and remember to make it sound like a good deal for them.  Like a job interview, the more proof you can show the more trust you will have and the more you will be taken seriously.  Receipts for medical bills or other unplanned expenses can be a good start to winning the good graces of credit companies.  Remember to keep your letter simple but provide enough evidence to seem legit.

You must also ensure that you are sending the right message when writing a letter to your creditors.  If you sound fake, dramatic or desperate you may not be taken seriously.  Make sure you are writing this letter as you would for any job, like a professional.  We are talking about money and paying people back so you must use this letter to be taken seriously, it will be your only shot at negotiating terms like this.

Find a letter template that helps you keep your letter within these guidelines and you have a good shot at convincing your creditors that you can pay them back in installments successfully.

Pay Debt in Installments Template:

(Enter Date)

(Enter Your Name and Address)

(Enter Creditors Name and Address)

Dear (Creditor Name),

I am writing in regards to the debt I owe (creditor name).  Recently I have come into financial hardship and wish to pay off my debt in installments.  I am reaching out to show (creditor name) my intention of paying this debt and hope we can reach an agreement.

The terms of my debt are (mention all terms of your debt such as total balance, percent interest etc. here).

I have attached documentation to emphasize my claim of hardship (attach a quarterly income /expense report, emergency medical bills and/or other supporting documentation).  Using the attached documentation I propose to pay (enter amount you can pay per month on your debt) each month until the debt is paid in full.

Thank you for your understanding and taking the time to consider my proposal.  I look forward to keeping an open line of communication until my debt is settled in full.


(Your name)