If you are unable to pay your debts, you should contact your creditor to let them know and see if they are willing to write off the debt.
This template is to be used for guidance and may not suit your specific situation. If you require more detailed advice and guidance, you can get more help.
If you need more help on using this tool, or you want to read about circ*mstances when you might use it, see Guidelines for using the letter templates.
Check if your creditor can still take action against you
Your creditors have a limited time to take you to court to repay a debt. For most debts, the time limit is 6 years. The time limit restarts if you write to your creditor or make a payment. If it’s a joint debt, this includes if the other person makes a payment.
If you haven’t got court papers after 6 years, your debt becomes ‘statute barred’ - this means your creditor can’t take court action to get their money back.
Don’t use this letter if:
Check if the time limit has passedor will pass soon. If you’re not sure,talk to an adviser.
Sam Hoolin
8 Park Avenue
Arlton
AL1 4CA
01632 960001
sam123@mail.com
Giltham City Bank
24 Station Road
Giltham
GT16 3LP
31 May 2024
Your reference: LL/ANO/Reminder1
To whom it may concern,
Account name: Sam K Hoolin
Account number: 12345678
I am sorry that I am unable to keep up my monthly payments to your company. This is because:
I am on long term sick and unable to work. I have claimed benefits and am waiting to hear the outcome of my claim. My situation is unlikely to improve.
I enclose a copy of my financial statement. This shows my income and expenses. You will see from this information that I am unable to make any offer of payment.
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.
Thank you for your help and I look forward to hearing from you.
Yours faithfully,
Sam Hoolin
Page last reviewed on17 March 2021
FAQs
Do Debt Validation Letters really work? Yes, they do. When a debt collector receives a Debt Validation Letter, they are legally required to provide validation of the debt. Debt Validation Letter's work best when they include a cease and desist clause that forces a lawsuit.
How do you write-off a bad debt request letter? ›
I am/We are writing to you because I am/we are in financial difficulties. My/our financial statement is enclosed. Briefly explain the reasons for your financial difficulties and why you do not expect them to improve sufficiently for you to make payments to credit (non-priority) debts in the future.
How to 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 you respond to debt collection letters? ›
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 happens when a collector does not answer a debt validation letter? ›
In the end, the debt collection agency might offer no response to your debt validation letter simply because they know they can't legally validate the debt. To continue to pursue the debt, they have to come up with proof. If they can't, the collection calls must stop and you've won the fight!
How successful is debt validation? ›
While debt validation requests can be a useful tool, they are not effective at resolving the issue. In most cases, creditors and collection agencies are able to provide the necessary documentation to prove the validity of the debt.
What are the requirements to write-off bad debt? ›
To show that a debt is worthless, you must establish that you've taken reasonable steps to collect the debt. It's not necessary to go to court if you can show that a judgment from the court would be uncollectible. You may take the deduction only in the year the debt becomes worthless.
What is a drop dead letter? ›
Send a 'drop dead' letter
You have the right to ask them to stop contacting you. To do so, you can send what's sometimes referred to as a “drop dead letter” — a written notice to the debt collector informing them you want no further contact. By law, debt collectors are required to follow this request.
What is the best way to write-off debt? ›
Which debt solutions write off debts?
- Bankruptcy: Writes off unsecured debts if you cannot repay them. Any assets like a house or car may be sold.
- Debt relief order (DRO): Writes off debts if you have a relatively low level of debt. Must also have few assets.
- Individual voluntary arrangement (IVA): A formal agreement.
Most credit card companies don't grant debt forgiveness unless you're many years past due on your outstanding debt. Even then, you should have at least a portion of your debt ready to pay as a lump-sum amount, since most companies won't forgive all of the debt you owe.
The borrower can apply for debt forgiveness on compassionate grounds by writing about the financial difficulties and requesting the creditor to cancel the debt amount.
How do you write a letter explaining debt? ›
There are a few guidelines that apply to writing a consumer explanation letter, regardless of the situation.
- Keep it short and to the point. ...
- Emphasize the circ*mstances that led to the issue. ...
- Explain how your finances have improved. ...
- Proofread your letter. ...
- Be nice.
Don't provide personal or sensitive financial information
Never give out or confirm personal or sensitive financial information – such as your bank account, credit card, or full Social Security number – unless you know the company or person you are talking with is a real debt collector.
How do you outsmart a debt collector? ›
You can outsmart debt collectors by following these tips:
- Keep a record of all communication with debt collectors.
- Send a Debt Validation Letter and force them to verify your debt.
- Write a cease and desist letter.
- Explain the debt is not legitimate.
- Review your credit reports.
- Explain that you cannot afford to pay.
To dispute collections, send a letter to the debt collector within 30 days requesting proof of the debt and asking not to report it to the credit agency until the dispute is resolved. Keep a copy of the letter and any correspondence. Seek legal help if needed.
How do I know if a debt collection letter is legit? ›
Send the agency a letter by mail asking them to confirm their debt in writing. Search for the company name on the internet, review their website, call their number, etc. Do your homework. If they refuse to answer all of your questions, there's a good chance you're in the middle of a scam.
What happens if you ignore debt letters? ›
Some of these letters have strict deadlines and your creditor can take further action if you do not reply. Ignoring them is not a good idea. Make sure your creditors have your current address. You might not know about court action if you do not get important letters.
Do debt settlement letters work? ›
Benefits of Debt Settlement
The balance owed is reduced, sometimes by as much as 50% It's a way to avoid bankruptcy for those who can pay the settlement amount. Once the debt is paid off, debt collectors or collection agencies will stop calling.
How do debt collectors prove you owe? ›
Again, most states require credit companies or the debt collector collecting on the account to attach a complete set of documents to the complaint. These documents usually consist of the original contract and any document showing that the company suing you actually owns the debt.
