Pay for Delete Letter (How to Write)

Negative credit information is never encouraging, really. The information contained therein may jeopardize your chances of ever receiving loans or being trusted by other financial institutions when seeking financial assistance. Luckily, there is a way out of all this. This is the ‘pay for delete’ avenue.

Under this arrangement, you pay up a specified portion of the debt, usually, 40% of the whole amount, after which you draft a letter to that effect. Upon meeting these two preconditions, the agency concerned will normally go ahead to delete the negative records. Our discussions here below center on this letter and how to draft it.

A “Pay for Delete Letter” is basically a communique that you draft and send out to a credit reference bureau either directly or via a debt collection agency. Its purpose is to ask the agency to delete the record of bad debt from your account pursuant to the settlement of no less than 40% of that debt.

Under this arrangement, a debtor approaches a debt collection firm and strikes a deal with it. The purpose of the deal is to have derogatory contents or records purged from his account. Typically, it is followed by settling a portion of the debt, during which time this letter is drafted.

A debtor drafts this letter and sends it to the agency concerned. That agency will launch an investigation that typically entails seeking information from the creditors to vouch for the accuracy of the details therein. It proceeds to delete the records after confirming the same. All these happen within 30 days.

When a “Pay for Delete Letter” doesn’t work, dispute it

This mode of having your records purged by a debt collection agency does not always work these days. That is due to the existence of the credit reference bureaus that are government-owned and mandated to follow up the records of debtors.

If you draft such a letter but do not receive the necessary outcomes, you have the leeway to dispute the same using the laid down structures or mechanisms. You have the leeway to dispute the provisions of the letter as many times as you wish. Use the laid down structures extensively.

What should you do if the ‘pay for Delete letter’ is rejected?

It may not always be a given that the ‘pay for Delete letter’ shall be successful. In the unlikely event that it is rejected, you should consider these options:

Draft a Method of Verification Letter

You may consider drafting a ‘method of verification letter.’ This letter asks the agency concerned to verify your own debt. That way, it will shed light as to why the agency is reluctant to delete the erroneous content. Also, the agency is obligated by the ‘Fair Credit Reporting Act credit laws’ to purge the record in the event that it is incapable of verifying the debt.

Re-negotiate Settlement

Next, you may also try to re-negotiate the debt settlement. This means changing the metrics of the debt portfolio appropriately. These could include altering the repayment period, rate of interest, penalties levied for late payments, and the other terms of references that govern the repayment exercise altogether.

Change the Collateral

All loans are backed and secured using the collaterals. If the one that is held in lien by the creditor is too expensive, think about changing it to a lesser and more affordable option. That will free it up and let you use the more expensive one for better tasks.

Alter the Payment Options

You may also think of altering the payment options. These are the avenues via which you repay the debt. Some modes of payments are often too expensive or rigid. In lieu of this, we recommend that you attempt that option that is cheaper and less stressful to undertake.

What should be included in the ‘Pay for Delete Letter’?

A typical ‘Pay for Delete Letter’ has to comprise all the details of the loan or debt instrument concerned. Below is a breakdown of the vital pieces of information that the letter has to comprise:

Dates

There are two dates that have to be incorporated in this letter. The first is the date when the debt obligation was entered into. The second, on the other hand, is the date when this letter is drafted. They provide the benchmarks against which any future references are made.

Relevant Addresses

This letter has to contain the relevant addresses of the debtor and the creditor. These ideally ought to be the addresses that were used when entering the debt obligation in the first place. They also make it possible for any references to be made with absolute ease.

Account Number

Each debt instrument is usually assigned a unique account number that is further used to reference it in any future negotiations. You have to supply this account number as it is the one that uniquely distinguishes this specific debt instrument from the others.

Turnaround Times

The turnaround time is the amount of time that is used to fulfill a request or complete a said task. This is the core of the bone of contention of this letter. Be sure to spell it out for all to see clearly. Then accompany this by stating exactly how much time you would want the creditor to give you to complete the payment.

Payment Amounts

As part of making the necessary negotiations, you may also work on the payment options. Ask the creditor to consider other options that are more flexible and easier to undertake overall. These should work alongside any other key negotiation points.

Tips for Pay for Delete Letter

To draft a letter of this kind well, you have to adhere to certain tips. Identified and explained hereunder are some of the top tips you may have to adhere to in order to do a better job:

Keep the letter concise

Only supply those vital pieces of information that are necessary to drive the point home. Leave out that superfluous information that is not in any way attached to the complaint at hand.

Carry out some background check

Before you even contemplate drafting this letter, it is necessary that you carry out proper background checks. Be sure to draft this letter if and only if this debt portfolio warrants the same. You do not have to draft it if the debt in question is not listed on the credit report.

Keep duplicates

It is always important that you keep a duplicate of the letter for the sake of easier future reference. This letter may be used as the basis for arguing cases in a court of law and dispelling any ambiguities too!

Send the letter via ‘Certified Mail Return Receipt Requested’

When sending out this letter, you should use the ‘Certified Mail Return Receipt Requested.’ This avenue is safer and more convenient as it lets you know whether the letter has indeed reached the recipient. Moreover, it allows for returns to the sender if the targeted recipient does not receive it.

Sample Letters

Stephanie Doris,

2900 S Memorial,

Parkway Drake Avenue,

Huntsville AL 35801

May 29, 20XX

Felix Paulson,

CEO – Alpine Hills Debt Collection Agency,

11610 Memorial,

Parkway South,

Huntsville AL 35803

Re: ‘Pay for Delete’ for account number 132018794009

Dear Sir,

I draft this letter to draw your attention to a $15,000 debt that I am currently servicing. Owing to my having defaulted on numerous occasions, I have inadvertently received negative reports. This, of course, will hurt my ability to receive loans going forward.

To stem this tide, I ask you to delete the report. Going by the contract we signed when entering the debt obligation, and I need to pay up no less than 45% of the outstanding balance.

I enclose a check worth $4,500 to that effect. (I had already paid up $5,000. Please check your records to ascertain this).

Kindly get back to me via 866-234-5382 to let me know your stance. As always, I look forward to a positive consideration from you.

Regards,

(Signature)

Stephanie Doris

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    Frequently Asked Questions (FAQs)

    Let’s take a look at some of the frequently asked questions surrounding this topic of discussion now:

    Does “Pay for Delete” increase credit score?

    YES, it does! The margin of this increase nonetheless depends on the amount of money you pay up to cover some of the debt obligation and your own negotiation power. It is imperative thus to negotiate well for the best possible rates and margins.

    Is “Pay for Delete Letter” legal?

    YES, it is perfectly legal. Nonetheless, there are some hurdles and limitations that tend to curtail its overall reach and efficacy. Chief among these is the existence of the credit reference bureaus that have largely taken over the role of overseeing debts.

    How long does “Pay for Delete” take?

    The standard duration of time that the process takes is roughly 30 days. It may take longer or shorter, depending mostly on the cooperation between the various parties and the kind of seriousness that the parties treat the entire exercise with.

    Deleting a negative report is a very critical thing to do if you want to boost your chances of ever getting loans at a later date. You can never gamble with this procedure hence. Take your time to read the explanations we have delivered above. Best of luck in your subsequent attempt to reverse your negative credit score.