Is it a crazy idea to settle your debts in writing? It is definitely not! In fact, it is the most ideal way to solve your debt issue on your own. Do you know that you can actually reduce your outstanding balances by writing a sound proposal? Moreover, you can also protect your credit by yourself without getting any assistance from any debt settlement companies. Let me show you the steps of writing the proposal.

Step 1:
Before writing the letter, find out whether your debt is with original creditor or debt collection agency.

Step 2:
After knowing your exact creditor, you are then required to determine the settlement amount you would like to propose based on your current financial situation. It is always better for you to offer to settle the debt in one lump sum. The best amount you can propose is around 40-50% of your total debt.

Step 3:
Start your proposal with all your basic information such as your name, address, contact information, your account number and your outstanding balance. Then, include a brief explanation on the financial hardship you are facing now.

Step 4:
Put in the amount of settlement you would like to pay and state the terms on how you would like your creditor to report your debt to the 3 major credit bureaus. It is important for you to send in this request so that the creditor will help to remove the negative entry on your credit report.

Step 5:
Submit your proposal by post. Bear in mind that you must not make any payment until you receive a return receipt and a confirmation letter from the creditor which states that your terms have been agreed.

If your request is being rejected for the first time, don't be upset. Continue writing to the creditor to negotiate.