Letter to Creditor Proposing Payment Plan

Letter to Creditor Proposing Payment Plan

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If you have debts and cannot make immediate payments, you can write a letter to the creditor proposing your payment plan. In the letter, you can describe your plan of paying off your debts in fixed and regular instalments.

The letter can also be used for instalment payments to prevent the creditor from taking further action against you. You should outline all the details of your payment plan proposal thoroughly so that the creditor is confident in your ability to repay all your debts.

The letter can be used.

  • When you and your organization are confident that you owe some money to someone.
  • When the whole payment cannot be made immediately.
  • When you want to stop the creditor from taking legal action against you or your company.

You can also take the help of your lawyer and ask him for

  • The debt which is claimed against you is incorrect
  • The dispute about the debt whether you owe the debt or not
  • Advice on protecting the proceedings of debt
  • Explain your rights, which are in the contract

Writing a letter to a creditor is a way to advise them about your current situation and ask them to communicate with you. Although you cannot stop creditors from charging your interest, they can help you by finding different ways to fight against your circumstances.

Sample #1

I am writing on behalf of my firm [name]. As you know, we bought sanitary fittings from your firm on [date], and there is an amount of [number] still outstanding on the bill. I want to start by apologizing for the late payment. As you know, due to the pandemic and the resulting lockdowns, all businesses were affected, and the construction business is no exception. Since all projects were delayed, the payment plan decided at the time of the contract went awry.

However, now that things are back on track and construction work is in full swing, we intend to return all the money we owe as soon as possible. We want to propose a new payment plan. Please review it and send us a confirmation if it suits you.

We want to return [number]% of the amount by [month]. The remaining [number]% would be returned in three installations over one year. The exact breakdown is attached to this letter, and we hope that you will find it fair to both parties.

Looking forward to your understanding and positive response.

#2

I [name] am writing to you on behalf of my father’s firm [name]. My father passed away on [date], and I will be running this business from now on. I understand that we owe you an amount of [number]. After much discussion with my late father’s team and a review of our finances, we have devised a payment plan to ensure that this amount is returned in time.

We will pay the first instalment of [amount] within [number of] months. The remaining amount will be paid back in biannual payments of [number]. We have tried our best to devise a plan that is fair to both parties and feasible for us in this struggling period after a huge loss.

We look forward to your empathy and assistance in this regard.

If you have any questions, please feel free to contact Mr. [name] at [phone number] or [email address]. We look forward to your feedback and are open to discussing any changes you require.

Looking forward to your understanding and cooperation.

Letter to Creditor Proposing Payment Plan

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