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What Can I Do When My Creditor Won’t Give Me a Debt Settlement Letter?

Written by Steve Rhode


Dear Steve,

I need clarification about my settlement. My loan is defaulted and I reached a settlement with the company to pay 40% of what I owe. The representative told me he will send me a settlement form after I pay but I refused to pay till I receive the form and make sure it is approved.

Is this the right way? I am not familiar with the process.




Dear John,

You are right to be hesitant.

What you are looking for is some way to memorialize the agreement between yourself and the creditor. After all, a settlement is nothing more than an agreement based on mutual acceptance of the terms.

The most common form of memorializing this agreement is to do it in writing. The lender will send a letter stating what the terms are and that payment must be received by X date.

Alternatively you could record your conversation with the representative or attempt to provide some evidence of the position of the creditor. An audio recording is okay but you have to be careful of state recording laws and then you’ve got the issue if the representative even has the authority to make and enter into such an agreement.

To further complicate things, some creditors don’t send letter in advance as a matter of process, yet some have proven they can be trusted and will send a letter later.

The reason it is so important to have some confidence in the settlement agreement is because without either confidence in the process or evidence of the settlement there is nothing that would prevent the creditor from coming back later and say they never agreed to settle. And that happens.

So for help in your specific situation I would suggest you consult with an independent debt coach that can give you specific advice on the current process of a specific creditor. You might have to pay for a consultation but it will be a small price to pay to get this right the first time. Consider contacting Damon Day, Michael Bovee, or Charles Phelan.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


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