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How to Settle Credit Card Debt Yourself + Debt Settlement Letter Included!

How do I get a copy of the debt settlement letter template below? 

On the right hand side of this page click on the twitter icon.  After you tweet this page, we will then email you a copy of the template below.

What if I have a question about how to negotiate debt on my own?

If you have any questions about settling debt on your own then please ask your questions in the comment area below.  One of our debt experts will then answer your question.  This helps the entire community to learn.

To settle a credit card debt yourself, before proceeding with negotiations, make sure the account is at the least 120 days past due. For even more leverage wait until the account that you are negotiating on, gets assigned to a collection agency.

Negotiating with the original creditor to settle a debt, could trigger a credit card lawsuit.

Before starting your negotiations mentally prepare.  Illustrate to the collection agency that you will have no choice, but to file for bankruptcy, if they are not willing to work with your limited funds. 

Take your emotions, and lock them in the closet before attempting to settle credit card debt yourself.  

Debt settlement do it yourself

Put on a Happy Face and Hide Your Emotions –  Remember, creditors are expecting you to be emotional when settling debt.

Step by Step Instructions on How to Settle

Credit Card Debt Yourself

Step One

You must document some type of hardship letter.  Keep this as professional as possible.  Send the hardship letter to the collection agency, with your debt settlement letter, which we are including an example of below for you to use.

Step Two

Illustrate to the collection agency that you lost the income required to continue paying anything on that account. 

Input all of your expenses including groceries, gas, rent, house payment, car payment, insurances and every single expenditure that you can think of on an excel document.  Add up your expenses and net income on this excel document. 

Now you have a hardship letter, a debt settlement letter and a detailed budget analysis.

Show the collection agency that you had to cut your grocery shopping down to half of what you were buying two years ago.  Show them grocery receipts.  Have your plan documented with proof. 

Step Three

Start your negotiations at 20% of the total debt owed.  For example, if you owe $100,000, offer the collection agency $20,000 to satisfy the debt.

They may come back at you with a counter offer.  If it sounds good, then sit on it, and then accept it within a few days. 

The collection agency will probably end up settling with you at around 60%-80% of what your total balance is, if you are successful.  Sometimes you may do better, and sometimes you will do worse.

There is a chance the creditor will sue you and take you to court, which is one of the main reasons why people would prefer to use a professional debt negotiating company to settle their debt.

If you wait until getting sued, to try to join a settlement program, most companies will deny you.  Most debt relief companies will deny a person from the program if they already have a lawsuit on one of their accounts.

Step Four

A person may want to give a counter offer if they are unhappy with the first amount that the collection agency is willing to accept.

In your counter offer, explain to the collection agency in writing that your family is willing to give you an extra $__, if they are willing to accept __% of the outstanding balance.  Explain to the collection agency that you have now completely exhausted all means of getting any other funds and that if they don’t accept, then you will file for bankruptcy.

Continue to express to the collection agency that the attorney who you are consulting with is providing you promising news about getting approved for a chapter 7 bankruptcy, but this is something that you are trying to avoid.

Step Five

Don’t agree to anything over the phone, without demanding that it also be in writing.  Require everything in writing for your protection.  Creditors are known to lie and use scare tactics on the phone.

Using the do it yourself debt settlement letter template below will be your protection.

Do it yourself debt settlement

The Downside

Do it Yourself Debt Settlement - Downside

The Debt Settlement do it Yourself Option, has a heavy downside!

1.  Creditors are fast to file a lawsuit and sue you.  A creditor is more likely to sue a person if they know that person is trying to negotiate debt on their own. 

At Golden Financial Services highly rated attorneys give our clients the legal protection they could need while having their debt settled.

An attorney assigned by Golden Financial Services will work to get a lawsuit dismissed while on the program.  The debt will then get settled as scheduled.

Read more about credit card lawsuits and defense.

2.  Using the Golden Financial Services program to settle your debt, allows you to piggy back on the high volume of clients that we have.  Having a massive number of client’s worth of debt to deal with on a regular basis provides our negotiators with a tremendous amount of leverage, where our negotiators can solidify larger discounts for you.

Do it yourself debt settlement will most likely lead to less savings.

3.  In the negotiation department at Golden Financial Services, the negotiators have established relationships and contacts with the different creditor agencies.

With do it yourself debt settlement, consumers don’t have these established connections.

4.  Golden Financial Services uses professional negotiators to negotiate, and there is NO EMOTION INVOLVED.   Creditors realize that it is an emotional process to settle credit card debt yourself.  Creditors recognize that they can scare you by threatening your financial well-being, credit worthiness and by creating potential financial stress.  The Fair Credit Reporting Act prohibits collection agencies from using these tactics, but they still exist.

5.  Do it yourself debt settlement options equal a tremendous amount of work and time.  At Golden Financial Services, we do the work for you!

At the end of the day, by utilizing Golden Financial Services you will save more money, and deal with less stress when it comes to settling debt. 

As a company we have the most affordable rates and fees out of any company in America. 

We have a tremendous amount of leverage and experience with creditors.

We have a proven debt settlement program track record of success going back since 2004

Our partners and partner attorneys are all highly rated and carefully selected. 

All this leads to SUCCESS!

Do it Yourself Debt Settlement Letter


If you would like a copy of this template, where you can fill in your information in order to use it, then simply tweet this post by clicking on the twitter icon on the upper right hand side of this page.  We will then email you a copy of this template.

Debt Settlement Letter Example Template

Do it Yourself Debt Settlement Letter Template

Proprietary settlement tool provided by Golden Financial Services. This debt settlement letter can be used to negotiate a settlement with creditors.
Debt Settlement Letter Example
Date Published: 03/26/2013
One of many effective tools used at Golden Financial Services to negotiate debt.
4 / 5 stars

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Posted in: Debt Relief Blog

Leave a Comment (6) →


  1. Aileene March 27, 2013

    I fell behind on my debts about 2 months ago. There is no way I can pay the minimum payment they are asking for now since they have tacked on so much interest and late fees.. How soon can I settle with these people if I can borrow money from a family member to pay them as a settlement?

    • https://nomorecreditcards.com/wp-content/themes/Sterling/images/global/img-default-grav.png
      Golden Financial Services March 27, 2013

      First off, if the creditors call you and are harassing you, then answer the phone one time. Let them know that “you don’t have the money to pay anything on these accounts at this time”, since you don’t.

      This should get them to chill out on calling you so much, since they will realize that there is no chance that even with their scare tactics, they will get any money from you at this time.

      Tell the creditors “you lost your income or job, or whatever the real hardship situation is”.

      Tell them that “you will call them back if your situation improves.”

      The call should be less than ten seconds.
      Say “thank you” and hang up the phone.
      Do not let them force you into having a conversation. If you have no money at this time, there is no point of trying to negotiate now either.

      Don’t show the creditors you are scared, or they will use that to their advantage. When you answer a creditor phone call, keep the call short, be honest and smart.
      This will create more time for you to gather some funds. On top of that, settling debt can be like wine. The longer the debt ages, the better your negotiating leverage and settlements will be.

      Once you do get the funds from your family, now you can start negotiating. Hopefully your account will have been sent to a collection agency by that time. You will have more leverage, and most likely get a better settlement, if your account is with a third party collection agency when negotiating.

      The downside with waiting until the account is sent to a collection agency is that there is a better chance that you will get sued. Once you are sued by a creditor, you would be lucky to get even a 20% discount, meaning you will have to pay back at the least 80% of your total debt.
      Just remember that everything should always be in writing when negotiating debt.

      Once you borrow funds from your family member, now you can start following the instructions on this page starting on step # one above.

      Use the debt settlement letter example that we provided you above. I will email you a copy of the template so that you can edit it, and put in your information. You can then fax or email this letter to the creditor.

  2. Aileene March 27, 2013

    I just talked to a couple of my credit card companys and more than half of them are working with me to lower the interest rates on my cards after telling them my situation. i didn’t think that they would work with me and i was too scared to answer their call until today. Maybe i don’t need to borrow from a family member anymore. Thank you for the advice!

  3. Keys October 28, 2013

    I recently pulled up my credit history online. I currently have 10 accounts that have been considered “seriously past due” ranging from $30.00 to $1,410.00 (which include personal cell phone accounts,cable accounts, parking tickets and medical bills – all in which are over 3-4 years old). In addition, I have four other accounts that have been considered “Revolving Accounts: Accounts with an open-end term”, balances ranging from $0.00 to $10,958,(which include closed credit cards that have already been paid off, however closed, charge off’s and repossessed auto loans.) My goal is to increase my overall credit score. What exactly does charge off mean? Is it a good or bad thing? How can I clear this matter if it has already been charged off? Are they still expecting for me to pay a balance that has already been charged off? Secondly, how can I increase my overall credit score? Would “on-time” payments for these debts be better for me than paying the total balance off all at once? What would be best for me in this case?

    • https://nomorecreditcards.com/wp-content/themes/Sterling/images/global/img-default-grav.png
      admin October 31, 2013

      These are all very good questions. The first thing that I would like for you to do is to please read this recent blog post we did on building good credit and then comment at that point with your additional questions. Here it is. http://nomorecreditcards.com/how-to-increase-your-credit-score-fast/
      The answers to a lot of your questions will be there.
      Also we are doing a series right now in our blog on settling debt on your own. We already published the first post on the FDCPA and this helps people with understanding their consumer rights. I recommend checking out the new series that we are having. We will have some experts coming in to teach about credit repair and this will probably benefit to you. Here is the blog. http://nomorecreditcards.com/category/debt-relief-blog/
      We are happy to help you out.

  4. loans with no credit check May 7, 2016

    Thanks for discussing your ideas. One thing is that college students have an alternative between federal government student loan along with a private education loan where it’s easier to opt for student loan consolidation than in the federal student loan.


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