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Letter to Multiple Creditors to Arrange Payment Plan

By: Garry Crystal - Updated: 21 Sep 2012 | comments*Discuss
Multiple Creditors Payment Plan Debtor

A standard letter to multiple creditors to arrange a payment plan is to ask for an amendment to the credit contract's terms and conditions. It will also be a form of negotiation with creditors with the intended outcome being one of reduced monthly payments or alternative options.

Writing to Multiple Creditors

Writing to multiple creditors with the intention of arranging a payment plan should not be undertaken until a financial assessment has been made. Some debts will be more urgent than others; these are known as priority debts. However, the same basic principles will exist for all creditors. Creditors will want to know that the debt situation is being taken seriously and that you are looking at alternative ways to pay back debts with a realistic payment plan.

Realistic Payment Plan Options

Creditors will be more inclined to take a request for a new payment plan seriously if the offer is realistic. There are a few options available when writing a letter to multiple creditors. As the letter is to multiple creditors the request should take the form of outlining different payment plan options. The letter can include a monetary offer of how much the debtor can afford to pay each month. The letter should also state that the debtor is contacting all other creditors with the same offer.

Basic Payment Plan Options

An alternative to stating a financial amount in the letter is to place options in the hope that one will be agreeable with creditors. This can take the form of reduced payment amounts with longer payment terms, frozen interest for a set period or time or paying the interest only for a set period of time. By offering these alternatives the creditor will be able to consider the options available and they may have certain policies in place to deal with new payment plans. This is a form of negotiation between creditors and debtors and the more options available, the more chance of success.

Inclusions in the Letter to Multiple Creditors

As this is a request for a new payment plan the creditors will require some basic information. This does not have to be a detailed financial breakdown of income and expenditure. This can be a simple notification that an assessment has been made of your current financial situation and that an adjusted repayment plan is required for a period of time. If this is due to a reduced income then state why this has come about and approximately how long this will continue until the situation can be rectified.

Closing the Letter

Letters to multiple creditors to arrange a payment plan should take the form of a request and not a demand. The language used in the letter should be business like and polite. The intention is to make creditors aware that the situation is being dealt with in a realistic manner. Make sure to include the option for creditors to make contact either by telephone or letter. Thanking creditors for their understanding and patience in the matter is also a good way to close the letter.

Using a Computer to Write the Letter to Multiple Creditors

The easiest way to write a letter to multiple creditors will be to use a computer. Using the copy and paste function (or mail merge) will save time and the only changes required to each letter will be the creditor address and the customer account number. Using a computer will also mean that the document can be easily saved and referred to when needed. Many software packages will come with standard letter templates that can be used to format the letters. It's just as acceptable to send a handwritten letter if you're not comfortable or familiar with computers.

Sample Letter to Multiple Creditors to Arrange Payment Plan

Your name

Name of creditor
Credit Company Name

Dear Sir/Madam

Re: Account No:

Further to our recent correspondence regarding my account balance I am writing to all of my creditors requesting the option of a new payment plan.

My employment status has recently changed and my income has been reduced. I have every intention of honouring this credit agreement and am hoping that an arrangement can be made until I can rectify this financial problem. I have outlined alternatives for your consideration and hope that one of these will be suitable to you.

After assessing my finances I would be able to maintain monthly payments of (monetary amount) until I can once again make full payments. Alternatively I am seeking the option to either pay only the interest on the account or have the interest frozen for a period of time. I think that six months would be a reasonable amount of time until my financial situation is rectified.

Please do not hesitate to contact me either by letter or telephone at your convenience. Thank you for your understanding and patience in this matter.

Yours faithfully

Your name

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