Debt Settlement Letter

[zipideedooda]

What is the name of your state? OH
In a few months a friend will be in a position to offer to settle with his credit card companies. The debts have either been charged off or are about to be. He would like to draft a letter to them proposing a settlement arrangement explaining that he has others CC to pay (with limited funds)and will deal with those companies who are willing to come to a satisfactory agreement.
How should this letter be worded? Do you offer 50% initially? One company has sent him a settlement letter offering to report the debt as "settled" if he pays 50% of the balance. From what I have read that isn't much better than not paying at all. Is that correct? Has anyone had any luck negotiating a better settlement? If so....how did you go about it?
I would appreciate any helpful information.

 

[cmorris]

Send any letter certified mail, return receipt. Start your offer low and include a clause that the unpaid portion cannot be sold or transferred. If they don't accept, you can send another letter, CMRR, offering a higher percentage.

This will not really improve your credit score. Sometimes you offer a pay for delete, but you usually have to offer most or all of the money without payment plans.

 

[zipideedooda]

Are you saying that, in your opinion, there is little point in trying to settle? There is no way he can pay most or all of what is owed. It's either attempt to settle or pay nothing in which case they will sue him.
I'm sorry but could you be a bit more specific than "any letter". Is there a sample letter somewhere?

 

[cmorris]

How old are these debts? They may be out of the statute of limitations. If they are and he gets sued, he has an affirmative defense. But we won't know without an answer to the above question.

Sample letters and tons of info can be found at creditboards.com.

If the debts are within thes statute of limitations and he may likely get sued, do a settlement. However, don't expect his credit to improve yet. A settlement does look better than a judgment, though. Just make sure with a settlement offer, it is very specific and has the clause from my first post.

 

[zipideedooda]

The debts are relatively new so the statute of limitations doesn't apply. Is it a waste of time to make a settlement offer and request that the debt be reported as "paid" with all negatives deleted? In my experience and from what I have read, most refuse to do this.

 

[cmorris]

It is different for different creditors. However, if they will do it, they usually want most or all of the money. Since it appears this is not a possibility, get a settlement agreement where they can't sell/transfer the unpaid portion.

 

[zipideedooda]

Thanks again.....you've been very helpful.