Applying a Proper Letter to Creditor

In regards to a letter to creditor or creditors, it is hard to be objective and realize that the worst responsibility in the world is for creditors to deal with nonpaying customers. And to be perfectly honest, usually a letter to creditor or creditors is not ever sent. Most nonpaying customers are struggling financially and emotionally by the time the creditor letters of past due bills begin to arrive, sent to customers who pretend the letters are not there.

If a letter to creditor is sent immediately, informing them what is going on and why the bill has not been paid, usually they are fair and pretty decent about it, willing to work out payments. Otherwise, they become frustrated to the point the bill is sold to another debt collector who is more ruthless with even higher interest rates, and so on. Individuals who have debt issues and are thinking of bankruptcy are of two types: those whose serious mound of debts are just beginning, or those who are longer into it—like neck deep and knee high. So to be fair, let us assume that the bills have just started coming in, and money is not available. What is to be done before things get too bad?

Before preparing a letter to creditor or searching for a template to do so, work on a list of the available household income, expenditures, and debts, which is called a "Statement of Affairs." This is necessary in order to find out how much surplus income can be distributed to the people who have money owed to them. A letter to creditor will not be able to be written, until this is done and the debtor has a fair idea of what money is available for them to spend. Once this list is done, many types of letters to a creditor can be prepared from the "Statement of Affairs" list.

It is possible to request a pro-rata basis for the time being from the creditor, in addition to asking for reduced payments for a designated period of time due to the extenuating circumstances. The thing to remember is this, in order to control the credit problem, do not offer more than can be afforded to pay. This could be making an offer of payment with such a high payment than cannot be maintained is extremely unwise, as the creditors are already taking a gamble with a non-paying customer. They really do not have to work out any further plans to get their money.

If an offer is made to a letter to creditor, regardless whether or not they will accept it, then make sure it is sent with proof and verification is used—first priority, return receipt, etc.. Send a registered bank check or bank money order, instead of the 50-cents money order at the local grocery store. The reason for this is because if the creditor says they never received it, the bank can back it up while the local grocery store takes up to six months, if at al.