SAMPLE FORM: Letter to Creditors
Before making the decision to proceed with filing for bankruptcy, you should exhaust all other avenues of making your business financially viable. One approach to consider is working with your creditors on a voluntary basis to see if you can negotiate a payment scheme that satisfies them and circumvents insolvency. The following letter is an example of the type of correspondence you may wish to use to facilitate debt repayment negotiations. It contains blanks for your entries; however, before sending any correspondence of this nature, it is best to have your attorney review it.
______________[date]
[Your name, company name and address] ________________________ ________________________ ________________________
[Your creditor’s name and address] ________________________ ________________________ ________________________
RE:
Account No. __________________
Dear Accounts Payable Representative: I am writing to inform you that due to circumstances beyond our control, ________________ [Your company name] is experiencing serious financial difficulties. As a result, we are regrettably finding it impossible to meet our financial obligations in a timely fashion. Through this letter, we are attempting to negotiate an alternative payment plan with your company that will enable us to pay you as much as possible while avoiding the possibility of filing bankruptcy. We are seeking similar resolutions with our other business creditors.
We value doing business with you and would like to maintain our business relationship. Accordingly, we propose that for the next ___ months we pay you the sum of $_________________ (__________________________________ dollars and _____________ cents) on the _______ day of each and every month. The unpaid principal balance will be subject to interest at the rate of ___ % per year until the total amount is paid. We hope that you find this arrangement acceptable. If you have any questions, please contact us. If you accept the terms of this proposal, please sign the original and return it to us in the enclosed envelope. You may keep the copy for your records. Thank you for your cooperation. We look forward to continuing our mutually beneficial business relationship with you. Sincerely,
_________________[Your name] _________________[Your title] _________________[Your company name]
I agree to the terms of repayment as set forth above. Date: ______________________ _______________________________ [signature] [Name of your creditor’s president or other executive] ____________________[That person’s title]