Letter to Creditors Requesting That They Forgive Debt - Sample Template Letter (2024)

[Today’s Date]

[Creditor Name]
[1 Downtown Street]
[City, Province Postal Code]

WITHOUT PREJUDICE

ATTENTION: CREDIT DEPARTMENT
RE: ACCOUNT #123456789 SMITH, JOHN

Dear [Creditor]:

My current income from [CPP, OAS, Disability Pension, Government Assistance, etc.] is not enough for me to be able to make any payments towards my alleged debt at this time. Due to my [medical condition/disability/age], I do not foresee any changes to my financial situation or employment status that would put me in a position to make payments any time in the future.

Please find attached [doctor’s letter(s), counsellor’s letter, case worker’s letter of support, description of condition and explanation how this affects your ability to work, any information you feel supports your statement of inability to pay now and in the future], as well as a copy of my [proof of income] and a monthly expense sheet.

I respectfully request that you forgive my alleged debt, as my condition precludes any employment, and my current and future income does not support any debt repayment.

Please respond to my request in writing to the address below at your earliest convenience. Thank you in advance for your understanding of my situation.

This communication is provided solely for the purposes of notifying you to communicate in writing only and does not constitute an acknowledgement of the alleged debt described above.

Sincerely,

[your name]
[complete mailing address]
[phone number]
[account number]

Letter to Creditors Requesting That They Forgive Debt - Sample Template Letter (2024)

FAQs

How do I write a forgiveness letter to a creditor? ›

I respectfully request that you forgive my alleged debt, as my condition precludes any employment, and my current and future income does not support any debt repayment. Please respond to my request in writing to the address below at your earliest convenience. Thank you in advance for your understanding of my situation.

How do I write a letter asking for debt forgiveness? ›

Unfortunately, my circ*mstances are unlikely to improve in the foreseeable future and I have no assets to sell to help clear my debt. I am therefore asking you to consider writing off my debt as I can see no way of ever repaying it. If you are unable to agree to this, please explain your reasons.

How do I write a letter to a creditor to remove debt? ›

Pay-for-delete letter example

I am (your full name), and I have an account with you (account number). I am reaching out today with a request to pay (dollar amount) in exchange for removing the debt from all credit reporting agencies. If an agreement is reached, I will pay this amount by (date of payment).

Can I ask a creditor to forgive my debt? ›

While it's highly unlikely that any credit card company will forgive 100% of your debt without it being part of a bankruptcy, you may be able to negotiate a settlement with your lenders in which they forgive a percentage of the balance you owe.

How do I write a letter to creditor to forgive late payments? ›

I truly believe that it doesn't reflect my creditworthiness and commitment to repaying my debts. It would help me immensely if you could give me a second chance and make a goodwill adjustment to remove the late [payment/payments] on [date/dates]. Thank you for your consideration, and I hope you'll approve my request.

How do I write a debt explanation letter? ›

Subject line should read “RE: Your name, loan number” Body should explain the issue and include specific details, such as names, dollar amounts, dates, account numbers and other clarification as requested. The conclusion should be courteous and indicate that you're available to answer additional questions.

What is an example of a letter to a creditor? ›

I am requesting that you accept payments of $______________paid on the__________. I assure you that I will add no further debt until my financial situation improves. I will begin making normal payments again as soon as possible. I regret that I have to ask for this consideration and hope that you will understand.

How do you get debt forgiven? ›

There are a few common ways to have your credit card debt forgiven, including working with a debt relief service, negotiating with your lenders on your own or filing for bankruptcy.

What is a 609 letter to remove debt? ›

A Section 609 dispute letter allows consumers to request verification of accounts on their credit reports. If the disputed information cannot be verified within 30 to 45 days, the credit bureaus must remove it from your credit history.

How do I get a creditor to remove a paid collection? ›

You can ask the creditor — either the original creditor or a debt collector — for what's called a “goodwill deletion.” Write the collector a goodwill letter explaining your circ*mstances and why you would like the debt removed, such as if you're about to apply for a mortgage.

What do you say to creditors to settle debt? ›

Tell the Truth and Keep a Consistent Story

Make a list of the reasons you've fallen behind in payments. Debt often results from hardships such as job loss, divorce, medical bills. Put them down on paper to use as a reference when you're negotiating a debt settlement with a creditor.

How do I write a strong collection letter? ›

The third collection letter should include the following information:
  1. Mention of all previous attempts to collect.
  2. Invoice number and amount.
  3. Original invoice due date.
  4. Current days past due.
  5. Instructions on what they should do next.
  6. A warning of the impending consequences.

How to respond to debt collection letter template? ›

I am responding to your contact about a debt you are attempting to collect. You contacted me by [phone/mail], on [date]. You identified the debt as [any information they gave you about the debt]. Please stop all communication with me and with this address about this debt.

What is a letter of satisfaction of debt? ›

What is a letter of satisfaction of debt? Satisfaction and release is a document stating that a consumer has paid the full amount of debt that was owed to a creditor under a court judgment. A satisfaction and release prevents creditors from attempting to recover more money from the borrower or consumer.

What to say to creditors when you can't pay? ›

Explain your current situation. Tell them your family income is reduced and you are not able to keep up with your payments. Frankly discuss your future income prospects so you and your creditors can figure out solutions to the problem.

What is an example of debt forgiveness? ›

For example, if you work in public service or for a nonprofit organization for a certain length of time and make regular payments, the remaining balance might be forgiven through the Public Service Loan Forgiveness program or PSLF. Income-Driven Repayment plans consider your income and family size.

What is an example of a hardship letter to creditors? ›

Because my income has dropped considerably I can no longer afford the terms of the original loan. As a loyal customer of your financial institution, I'd like to ask for the following: ▪ A lower interest rate amount of NO MORE THAN 6% ▪ Accept lower payments of $ _________ per month.

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