Is It Possible To Send A Sample Settlement Letter To Creditors Even If The Consumer Is, As Of The Moment Unable Or Can't Afford To Pay?

Is it possible to send a sample settlement letter to creditors even if the consumer is, as of the moment unable or can't afford to pay?

I just got that question, which I think translates to, "Would the settlement company admit a consumer that doesn't have the money yet to settle with the creditors and provide them with a settlement letter?"

Is it possible to send a sample settlement letter to creditors even if the consumer is, as of the moment unable or can't afford to pay?

Or that the consumer is just asking for a sample settlement letter because he/she wants to settle the debt d.i.y. (?)

Speaking of debt settlement letter and creditors, this is from payingpaul.com

"-It is important that one do not disburse any payments to a collection agency or credit card company unless they receive a signed settlement letter.
-Creditors have been known to dupe unsuspecting consumers by making settlement offers and checks by phone when no written agreement was ever in place.
-Meanwhile, consumers do not learn of their dubious technique until the next statement arrives in the mail and the payment for settlement is actually just deducted from the principal balance.
-It should be noted, however, that some credit card companies in particular may insist on getting your checking account information before issuing a settlement agreement. If this is the case and the settlement offer is very lucrative, then one may want to consider submitting checking account information, but post-dating their check so that the debit can be blocked or canceled if a letter is never received.

In general, banks are more trustworthy in this regard to honoring these agreements than third-party debt collectors. Some popular banks that one may encounter doing this include Bank of America, HSBC, Citibank, Discover, Washington Mutual, Wells Fargo, Chase, American Express, and Capital One to name a few."

Okay here is a sample settlement letter to creditors:




=====================================================
___________(name)
___________(address line 1)
___________(address line 2)


___________(collection agency or creditor)
___________(address line 1)
___________(address line 2)

_____________(date)

RE: _____________(account number)

Subject: Settlement Offer Current Account Balance: ______ Dear ________________,

This letter is to confirm our conversation on _____(date of conversation) during which ___________(debtor) made the following offer to settle the above referenced account:

I, __________ (debtor), will pay ____________(bank or collection agency) _______ (settlement amount) through certified funds to be received in your office no later than __________(date). This will fully satisfy the obligation of the parties under the above referenced account. _____________(bank and collection agency) will then cease all collection efforts.

__________(bank and collection agency) reserves the right to withdraw this offer in the event that full payment is not received by ________(date).

I am pleased that we could work with ________(collection agency) to resolve this matter. If you agree to the above agreement, please sign and fax back this agreement to ______(fax number) and funds will be disbursed accordingly.

Creditors Position or Title
_____________________________

Creditor’s Authorized Signature:



Date:

____________________

Sincerely,

________________(name)

===============================================

Is it possible to send a sample settlement letter to creditors even if the consumer is, as of the moment unable or can't afford to pay?

To answer that question, I think I overheard a negotiator from a settlement company, talking about an account that they refer to as "gone legal" -- meaning the consumer enrolled in the settlement program to avoid being handed a judgment.

How did the consumer get in the program if he/she doesn't have money yet? I think the consumer's debt amount and account status qualified for the program.

-over $10,000 total debt
-past due accounts

Plus the consumer was able to afford the settlement company's fees.

The settlement company would try to act in behalf of the consumer and negotiate a deal with the collection agency or creditors. I mean the law firm. Since it has gone legal.

Speaking of settlement company's fees:

Debt settlement companies will usually charge 15% of the total debt amount and spread the fees out over 18 months or they will take a percentage of the settlement amount, usually between 20-25%.

The consumer, in the program, would have to save up a certain amount and that would be used to negotiate to the creditors with.

Is it possible to send a sample settlement letter to creditors even if the consumer is, as of the moment unable or can't afford to pay?

Is that like giving the lender a promissory note of sorts? I think that would be sending the wrong signal to the creditor because there has to be an assurance that the consumer would indeed be able to pay.

Is it possible to send a sample settlement letter to creditors even if the consumer is, as of the moment unable or can't afford to pay?

What do you mean can't afford to pay? You mean can't afford to pay the minimum monthly payment or the lump sum payment?

Anyway, I spoke to a negotiator about this and she said that what happens is -- the settlement company would accept a client that's already received a notice from the law firm (representing the creditor/collection agency) and would determine with him/her just how much he/she can afford to pay monthly -- then the settlement company would call the law firm and state the amount that the client can afford to pay lump sum or installment. If they accept then a settlement letter is going to be sent the collection agency.

Right Karess. But even then, giving a good faith payment may not suffice.

Is it possible to send a sample settlement letter to creditors even if the consumer is, as of the moment unable or can't afford to pay?

I think the first letter to be sent to the creditor/collection/law firm is what is called the POA or Power of Attorney.