If you're deep in debt and trying to avoid bankruptcy, a proposal for payment can convince the creditor that you are willing to cooperate to settle your account. If you are unable to pay the full amount you owe, even over time, you can offer a smaller, good faith amount, usually 40 percent to 60 percent of the total debt.
Collect letters and forms that prove the financial hardship you're currently enduring is beyond your control. These can include bills for medical expenses, letters from lawyers if you're going through a divorce, or a death certificate if a family member has recently died.
Write your name, address, account number, outstanding balance and current interest rate at the top of your proposal for payment letter.
Explain sincerely why you've been unable to make the previously discussed payments. Reasons can include loss of employment, sudden medical expenses, or a death in the family. Attach the supporting documents that you collected in Step 1.
Tell your creditor how much you can pay. This will normally be between 40 percent and 60 percent of the total debt.
Inform your creditor when you will be able to start paying, and whether you will pay with one lump sum or a series of smaller payments. A lump sum payment generally will be more attractive to the creditor, and be more likely to result in a settlement.
Write, "After x amount is paid, the creditor will report debt as 'paid in full.'" In this case, "x" is the amount of debt you wish to pay and "creditor" is the person/business to whom you owe money. For example, if you were willing to pay $3,000 to AT&T, the sentence would read, "After $3,000.00 is paid, AT&T will report debt as 'paid in full.'"
End the letter politely while requesting immediate attention.