Sample Creditor Letter

Any state employee who is affected by the impasse (which, basically, means all of us) should consider reaching out to his or her creditors to let them know what’s going on.  Even with 10 weeks’ worth of spending money in savings, I’ve contacted all of mine to inquire about deferment and emergency arrangements.  Creditors are a finicky bunch, and they’re a lot more likely to help you out if they know you’re dealing in good faith.  But you need to be careful in how you approach them.

First, if you tell them you can no longer pay them, you may get dumped into collections immediately.  Don’t do this.  Instead, stress that you are temporarily being affected by extraordinary circumstances, and that you anticipate a resumption in pay “soon”.  If you can make them understand that you’re not simply blowing them off, they will be much more likely (but still not guaranteed) to work with you.

Second, remember that creditors are under no obligation to help you.  I know that sounds harsh, but that’s the way it is.  Logic dictates that it would be better for a given creditor or utility company to agree to defer payments for 90 days for customers in good standing, but who said business is logical?  Still, it’s worth trying.  And don’t feel bad if they can’t / won’t help.  You didn’t put yourself into this situation.

Third, I always recommend handling important financial matters like this in writing.  Let’s face it; a lot of call center employees are simply overworked and underpaid.  Their job is to get you off the phone as quickly as possible.  Whether it’s an honest mistake or a rush job, there’s a chance your call may not be handled properly.  Plus, by communicating in writing, you’ll have a paper trail of any arrangements and offers that were made.  Here’s a sample letter you can copy, drop into your favorite word processor, and edit for your own needs & situation (specifically, don’t say you have money in savings if you don’t have money in savings).  Note that I am not a lawyer, and what works for me may not work for you.  This letter is only a suggestion.

(Your name & address)

(Creditor’s name & address)

(Today’s date)

Dear (creditor)

I am writing to you in reference to my account number (insert account number here).  As you may be aware from your records, I am employed by the Commonwealth of Pennsylvania.  Due to a budget impasse forced upon me by my legislature and governor, the paychecks of all Commonwealth employees — including myself — have been temporarily interrupted.  Please be aware that I do have some money set aside in savings, and intend to do everything in my power to continue meeting my financial obligations.  However, due to the unprecedented and catastrophic nature of these circumstances, I am unsure when my paycheck will resume.

Once my paycheck does resume, I will be paid for all back wages due.  Once that happens, I will be able to make any missed or deferred payments promptly.  I am therefore making this good-faith request for your assistance in this matter.  I would like to know if you have any short-term programs, such as deferment, forbearance, emergency interest freezes, or interest re-capitalization, that I can use to help ensure that my account remains current.  I wish to stress that I am in no way refusing to pay.  I am willing to consider all suggestions, and would prefer any solution which prevents the reporting of any derogatory information to credit bureaus.

Thank you for your assistance in this matter.


(Your name and signature)

If you encounter any particularly good or bad institutions in relation to this, by all means feel free to post your success story (or nightmare) below.

8 thoughts on “Sample Creditor Letter”

  1. Excellent. As always, thank you for your outstanding level of help during this nonsense. This site has been a wealth of information, solid advice and support. God bless you.

  2. All of the arrangments I made were over the phone. I have kept record of dates, times and names of whom I spoke too. Most are sympathethic and willing to help. Unfortunately, that is not the case with all of them. Just be honest. It’s all you can do. Be proactive. Contact them before they contact you.

  3. I had no problem with my auto loans through PSECU, they were more than cooperative. I will say this, the budget impasse has screwed up my real estate purchase. Me and my wife may have to walk away from the house we love, before closing, because at this time, I cannot part with my savings not knowing when I will get paid again.

  4. Jimbean, don’t give up on the house just yet. Hold on a little longer. I just have a gut feeling, between tomorrow and Friday, we’re gonna get the good news. Hold tight and keep the faith. We’re going to get through this.

  5. Channel 2 out of Pittsburgh is looking for people to interview about what this is doing to the state employee’s and what they are experiencing with their creditors. Linaberger, Anne

  6. Linaberger, Anne – Sorry forgot the email address.

    Our stories can’t be told if we are not willing to stand up and speak out.

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