Four Letters That Will Help You in Your Debt Payoff Journey

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The following is a guest post written by Frank Collins. Enjoy! 

Four Letters That Will Help You in Your Debt Payoff Journey

Many people don’t realize the value of letter writing. In fact, many of your rights regarding credit card and debt can only be exercised if you send a written letter. Sometimes simply calling the bank or business isn’t enough to strike a deal with your debt. Here are a few letters to keep in your arsenal of tools for attacking debt.

Debt Validation Letter

Use the debt validation letter with debt collectors in the first 30 days after they contact you about collecting the debt. The debt validation letter tells the debt collector that you dispute the validity of the debt. Once the debt collector receives your letter, they can’t contact you anymore until they send valid proof that the debt is yours and they’re supposed to be collecting it. If they don’t have the proof or can’t get it, then you don’t have to deal with that collector again, for that specific debt at least.

Credit Card Billing Dispute Letter

You don’t have to pay for billing mistakes as long as you recognize and report them in a timely manner. You have 60 days from the date the billing statement was mailed (or emailed) to you to report the error.

While you can call your creditor to report the error, the law specifically states that you should report the error in writing. There’s no harm in doing both. In your letter, list the billing error and state why it’s inaccurate. Then, the credit card issuer will acknowledge your letter and take steps to resolve your complaint. Make sure you report the errors quickly so you’re not held liable for them.

Debt Settlement Offer Letter

If you’re behind on your account payments by 90 days or more and you don’t think you can afford to catch up or pay the balance in full, you can send a debt settlement offer letter.

In the letter, state that you’re having financial difficulty and would like to settle your account. List the amount that you’re able to settle for and wait for the creditor to respond. If the creditor accepts your settlement offer, be prepared to send your payment before they take the offer off the table.

Pay-for-Delete-Offer Letter

With the pay-for-delete-offer, you can knock out your past due debt and improve your credit at the same time. The pay-for-delete letter offers to pay your account balance in full, and in exchange, the creditor agrees to remove negative information from your credit report. Keep in mind that the pay-for-delete is just an offer and the creditor isn’t obligated to give in to your request. In fact, you’ll have to get your letter to just the right person, a supervisor or executive, for the offer to be accepted.

Sending Your Letters

On the time sensitive letters like debt validation and billing error dispute letters, it’s a good idea to send them via certified mail with return receipt requested. That way you have proof of when the letter was sent and received. You can use this proof to appeal to a higher authority, e.g. the FTC, if the creditor doesn’t respond in a timely manner.

How about you all? What rights or strategies have you exercised in order to help payoff (or better manage paying off) your debt? 


Have you tried sending in any of the 4 letters mentioned above? 


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

  • Thanks so much for such an informative article, Frank! I must admit that learning about all of these rights people have/techniques that people can use to help manage their debt payoff made me feel quite in the dark, as I have fairly little experience in this area.
  • However, I imagine that a lot of people are in the same boat as me in that they don’t know that many of these rights/strategies are available to them. So, thanks for laying them out in plain sight for us to analyze!
  • It’s also interesting that despite all of the technology available to debt-companies these days, there are apparently still many official actions that can only be managed and handled through good ole-fashioned mail! haha This was also the case I experienced recently when opening a self employed 401(k) account with Vanguard. They required that the hardcopy application be sent in via the US Postal Service.
  • @ Debt validation letter – 
    • Interesting! This sounds like a good way to at least delay (or maybe eliminate all-together) being bothered by certain debt collectors. 
    • One thing I’m curious about though is what exactly is required for “valid proof” that the debt they’re collecting is correct? Is there a standard form for this, or can it just be an “overdue balance” statement from the credit card company?
  • @ Receiving receipt confirmation when sending important debt reduction letters – 
    • In my experience, whenever you’re sending a letter either by physical mail or email that is not SPECIFICALLY requested by the receiving party, you always have to be prepared for the likelihood that it will simply be ignored and/or lost. After all, if they’re receiving hundreds of pieces of mail per day, why should they place your note at the top of the pile?
    • As such, it definitely makes sense to have a way to validate that the receiving party actually did receive the letter. Paying the $0.30 extra for delivery confirmation can go a long way to helping you achieve your goals in this case! 
  • @ Not being scared of your creditors – 
    • Lastly, I think that another important thing to point out with the whole process of paying off your debt is to avoid viewing the company to which you owe a debt as some powerful, evil entity that has the power to SUCK OUT YOUR VERY SOUL! 
    • As you can imagine, at the end of the day, the company to which you owe money is just made up of normal people who want to accomplish their goals and add value to others’ lives. Because of this, it actually is in THEIR best interest AS WELL AS YOURS to work with you in order to get you to pay off your debt. 
    • Often, I think people are surprised at how flexible debtees can be in helping their debtors pay off their debt, either by being flexible with interest rate or even payoff terms overall. Typically, this flexibility can only be discovered if you take action and ask about what you can do. After all, the worst that can happen is that they say, “no.”

***Photo courtesy of http://farm3.static.flickr.com/2105/2510296904_408a716826.jpg

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