When you’re not able to keep up to date with your payments on your unsecured debts, it’s important to provide your creditors with an update about your circumstances.
Depending on your situation, one of these 3 sample letters may help you communicate effectively with your creditors. As you get ready to use one of these letters, either with a mailed letter or by email, it’s important that you know how to use the letter properly and what you need to include with your letter when you send it to your creditors.
Legislation Varies by Province When Communicating in Writing
The reason for sending your creditors a letter is to advise them about your situation and in some provinces, asking collectors to only communicate with you in writing as well. It won’t stop them from charging you interest. However in many circumstances, they will try to find ways to help you.
By not proceeding with escalated collection activity or legal action, you are able to focus on improving or resolving your circumstances. This will help you sleep better and not worry about what your creditors may or may not do.
Please Note: If you have not made payments on a debt in some time and you contact a creditor in writing, either on your own or with one of the sample letters below, in some provinces that may constitute "acknowledging the debt," and restart the statute of limitation in the same way making a payment does.
Always use the term "alleged debt" when speaking with collectors or creditors. Sometimes they may try to get you to verbally acknowledge the debt. This, too, could restart the statute of limitation.
The statute of limitation that determines how long a creditor has to collect on a debt that is no longer acknowledged by the debtor varies by province and ranges from 2 to 10 years.
Credit reporting agencies also report debts on your credit report based on the date of last activity on the debt. After 6 years of no activity a debt is usually no longer reported by the credit reporting agencies.
Sample Letters to Creditors
When I can only make smaller payments – Reduced Payment Ability
When I can’t make any payments – No Ability to Make Payments