Debt settlement agreement with creditor or collection agency

If you're working out a debt settlement agreement with your creditor or collection agency, make sure you get it in writing from them. This is when you need the Debt Settlement Agreement Letter stating the terms and conditions of the settlement.

The Letter

Your Name

Your Address

Your Phone #

Creditor's Name
Creditor's Address

Dear Sir or Madam,

Re: Account Number

On behalf of , hereafter referred to as Creditor and , hereafter referred to as "Debtor", agree to negotiate and settle the debt under the following terms and conditions.

The Creditor and Debtor agree that the current outstanding debt is $ . Creditor agrees to accept less than the full amount of the debt, provided that Debtor makes payment on or before . Both parties agree that the Creditor will accept a cash payment of $ towards the settlement of the debt in full.

If the Debtor fails to send in the amount agreed by , the Creditor shall immediately demand the payment of the original amount owed by the Debtor.

This agreement for debt settlement shall be binding upon the Creditor, Debtor, and their successors and assignees.