Letter to Creditor Proposing Payment Plan

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

The letter can also be used for installment payment to stop the creditor from taking any 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 have owed some money to someone.
  • When the whole payment cannot be made immediately.
  • When you want to stop the creditor from taking any 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

The reason behind writing a letter to a creditor is that you can advise them about your current situation and ask them to communicate with you. Although you cannot stop the creditors from charging your interest they can help you by finding different ways to fight against your circumstances.

Preview and details:


I am writing on behalf of my firm [name]. As you know that we bought sanitary fittings from your firm on [date] and there is an amount of [number] still outstanding on the bill. I would like to start by apologizing for the late payment. As you know that due to the pandemic and the resulting lockdowns, all businesses were affected. 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 amount we owe as soon as possible. We would like to propose a new payment plan. Please go through it and if it suits you send us a confirmation.

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

Looking forward to your understanding and positive response.


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

We will be paying the first installment of [amount] within [number of] months. The remaining amount would be paid back in biannual payments of [number]. We have tried our best to come up with a plan which is fair to both parties and is feasible for us in this struggling period when we have just undergone a huge loss. We look forward to your empathy and assistance in this regard.

In case of any queries, please feel free to contact Mr. [name] on [phone number] or [email address]. We are looking 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

File: Word (.docx)
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