Whenever you borrow money or settle your debt, you must have proper documentation. All the terms and conditions must be put in writing in order to protect the lender as well as the borrower. Bear in mind that a written document can prevent any confusion and it ensures that both parties have a viable paper trail in case of legal issues. Below are the important steps you need to take to settle a debt in writing.
Write to your creditor(s) informing them that you want to settle your debts. You are required to give a brief explanation as to why you need to settle your debt, such as being retrenched, facing financial hardship, suffering from illness or bearing an unexpected hospital expense due to accident, etc.
Inform the creditor(s) about the payment amount that you can afford and the expected date when the debt will be paid off.
Convince your creditor(s) that you hope they will accept your payment plan. If not, you have no other choice but to file bankruptcy.
Indicate to your creditor(s) to provide a letter of agreement if they accept your proposal and consider this matter is closed. You must obtain the letter from them to confirm this fact so that you can prove to the credit bureaus in the near future.
Before you end your letter, include spaces for you and your creditor(s) to sign above the full names. Make sure your creditor(s) sign and return a copy of letter to you once the terms of the debt repayment are agreed upon.