How to write a final payment letter

A person who owes a debt often sends a final payment letter to a collector or creditor when making the final payment. This letter is important, especially when the final amount the debtor is paying is different to the total amount of the bill. Normally, this letter is written and sent before the payment is made so the creditor has time to review the account and determine if this amount will meet the balance owed.

Date and address the letter. At the top of the letter, write the date. Include your name, address and phone number below the date. Address the letter to the creditor or collector by writing the organisation's name, contact person's name and the address.

Include your account number. Below the addresses, write the name of your account number or reference number. Place this at the top of the letter so the reader can easily identify to which account this letter applies.

Introduce the purpose for writing the letter. A final payment letter is used to finalise a debt you owe and stop any further communications with the debtor, other than to receive a letter stating the debt has been satisfied. State the amount you owe and include the amount you will pay. These two amounts may not match. Sometimes creditors agree to dismiss a portion of a debt if a certain amount is paid by a specified date.

Explain that the payment will be marked as "paid in full." Include a statement that clarifies your intentions of fully satisfying the debt. Inform the creditor that you will post a payment for a specified amount and that it will be in the form of a cheque. The cheque will contain the words "paid in full" and that you will assume if the cheque is cashed that the creditor agrees with your terms.

Ask the creditor to review your account. Request that the creditor takes the time to review your file and, if a discrepancy is found, you would like a written explanation within 30 days. Inform the creditor that if you do not hear back, you will assume the creditor agrees with the information contained in this letter. Explain that if this occurs, you will assume that when the cheque is cashed, you will expect no further communications with the organisation.

Close the letter. Offer your phone number so the creditor can contact you if any questions or comments arise. Sign the letter "Yours sincerely," followed by your name.

Send the letter by registered post. The only way to know that the creditor received the letter is by sending it registered. This requires a signature from the creditor's office acknowledging the receipt of the letter.

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About the Author

Jennifer VanBaren started her professional online writing career in 2010. She taught college-level accounting, math and business classes for five years. Her writing highlights include publishing articles about music, business, gardening and home organization. She holds a Bachelor of Science in accounting and finance from St. Joseph's College in Rensselaer, Ind.

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