Letter for debt forgiveness 2023 (guide + free samples)


This post covers everything you need to know about letter for debt forgiveness

The majority of Americans frequently have difficulty paying their bills on time. (source)

So what?

That drags them into debt and destroys their credit score.

In fact, a single debt can drop your credit score by as much as 180 points (source)

Sometimes it may not be your fault for being in debt, but you must take responsibility to get out of it.

Any solution?

Apart from deletion requests, goodwill adjustments, and debt settlement requests, there is another compassionate way to get rid of debts.

And that is through forgiveness requests.

How do you go about that?

Write a formal letter- A Letter for debt forgiveness

Daunting where to start?


Here I will guide you through the following;

  • What is Letter for debt forgiveness?
  • Is Letter for debt forgiveness binding?
  • Why do you need a Letter for debt forgiveness?
  • How to write an effective letter for debt forgiveness
  • letter for debt forgiveness sample
  • What should you do after sending your letter for debt forgiveness?
  • What if your letter for debt forgiveness does not work?
  • etc.

In addition to that: To help you kill two birds with a single stone, I will share with you two samples of a debt forgiveness letter from a creditor.

Let’s get started

What is Letter for debt forgiveness?

A letter for debt forgiveness is a brief statement of facts written by a debtor to a creditor to request a debt write-off for compassionate reasons.

A letter for debt forgiveness comprises a formal request that, if accepted, should open the door for complete debt release.

This letter should typically explain why you are unable to pay the debt and demonstrate how forgiveness is the only option.

Is Letter for debt forgiveness binding?

A letter for debt forgiveness is not legally binding.

It is merely a request for debt relief.

A creditor is not obligated to accept or even consider it.

In fact, debt forgiveness is not a right. It is just a privilege.

Why do you need a Letter for debt forgiveness?

You are already aware that a letter for debt relief is not legally binding.

Is it still necessary?

A huge YES.

Here’s why:

The primary reason you require a letter for debt forgiveness is to obtain debt relief. When you try to eliminate debt through forgiveness, you may reduce your use of credit, which raises your credit score.

A letter for debt forgiveness can open the room for negotiation and help you avoid anxiety, stress, and overwhelming collection procedure by explaining to the creditor your financial concerns.

That may also help you maintain a good relationship with the creditor

How to write a letter for debt forgiveness

A letter for debt forgiveness is written in a business letter format. Begin your letter with your address and contact information, followed by a date and creditor’s address, and state that you are writing to request debt forgiveness since you are unable to pay the entire amount and provide the reason to that effect.

Finish with “Sincerely,” followed by your name and signature.

REMEMBER! the main purpose of your letter for debt settlement is to get debt forgiveness.

Therefore, to write an effective letter for debt forgiveness, do the following.

  • Include your name and contact information
  • Include the date of the letter
  • Include the creditor’s address
  • Include your account number
  • Explain why you are unable to pay the debt.
  • Attach necessary documentation-medical records or other documented proof of your circumstances.
  • Explain how forgiveness will help you
  • Do not expressly acknowledge the debt unless it is already validated
  • When you refer to a debt, always use the term ‘alleged debt
  • Maintain a professional tone
  • Provide avenues for further settlement options
  • Be honest
  • Be humble
  • Be respectful

other useful tips

  • Send your letter by certified mail with a return receipt requested so you know when and if the creditor receives it.
  • Keep a copy.

Letter for debt forgiveness sample

Helena Bay
124 Parker St
Utica, NY 13502
(315) 457-6777

July 18, 20…

Dr. Karen Shaw
High Hill Hospital
4645 Main St
Gasport, NY 14879

Re: Medical Bill No: 678-879-100
Amount Listed: $913

Dear Dr. Shaw

It is with great enthusiasm that I write this letter to humbly request you to write off the above-alleged debt for compassionate reasons- my condition precludes any employment, and my current and future income does not support any debt repayment.

I recognize the significance of meeting my obligations and I never failed to pay my bills on time but my recent sight loss has caused me to lose my job, and I do not anticipate any changes in my health, financial situation, or employment status that would allow me to pay the debt in the future.

Please find attached the termination letter, copies of my Bank statements as well as my monthly expense sheet.

Accepting this request will help me build my whole credit history and indicate that I am a trustworthy client.

Please be aware that I am also open to accepting any debt settlement offer that you deem appropriate.

Kindly respond to my request in writing at the address provided above at your earliest convenience.

I appreciate your understanding and consideration regarding this matter.



Helena Bay

Letter for debt forgiveness pdf

What should you do after sending your letter for debt forgiveness?

You will have to wait for a response after you have written and sent the letter to the creditor.

Please be aware that you may or may not receive a response.

If the creditor responds, ensure that they give a guarantee that they have approved your request.

This promise should be in writing, preferably on company letterhead.

Remember that the creditor may reject your request without alerting you; they may “respond by not responding.”

If a creditor did not expressly and positively respond in writing, your request for debt forgiveness could not have been successful.

What if your letter for debt forgiveness does not work?

The approval of your request for debt forgiveness is unfortunately not guaranteed.

Here are several options if your letter is not successful:

  • Find a way to settle your debt in full anyhow; living a debt-free life is always awesome.
  • Don’t pay, Wait until your credit reporting limit has been reached (7 years) and the item has been removed from your credit report. It is important to be aware that collection efforts will continue and that you can face legal action for the debt.

Debt forgiveness letter from a creditor

A debt forgiveness letter is a brief statement of facts written by a creditor to inform the debtor that he is no longer obliged to pay the outstanding debt.

Typically, this letter is given when the creditor has determined that it is either not worthwhile to post the debt for collection or that they may gain equally as much by treating the receivable as a loss on their tax return.

While a creditor may forgive debt for a variety of reasons, the most common is that the debt isn’t worth pursuing.

Debt forgiveness is frequently granted after the debtor has missed multiple payments and the creditor has not yet forwarded the debt to a collection agency.

Sample debt forgiveness letter from a creditor

Debt forgiveness letter from a creditor, sample debt forgiveness letter from a creditor

[Creditor’s Company]
[Creditor’s Street Address]
[Creditor’s City, State, and Zip Code]


Consumer’s Name
Consumer’s Address
City, State, Zip Code


Account/BillNumber: [#]
Amount Listed: [$#]

Dear [Consumer’s Last Name]

This is to inform you that we have decided to completely forgive you for the above outstanding debt because of the size of the debt, your current financial status, and the fact that you’ve been our esteemed lifelong client.

We really appreciate your loyalty and hope you will stay with us in the future.

If you have any questions regarding this letter feel free to reach me at [email] or [phone].




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Isack Kimaro
Isack Kimaro

Holder of Bachelor of Laws (LL.B) and Post Graduate Diploma in Legal Practice. I am dedicated to providing valuable and easy-to-understand legal information for individuals at all levels of understanding. Whether you are a layperson looking to increase your knowledge, a law student striving to excel in your studies, or a practicing lawyer wanting to expand your expertise, I am here to help. I'm not creating content, I'm creating awareness to empower you to take control of your legal understanding and achieve your goals.