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Pay-for-Delete Letter Template

Use this template to negotiate with a collection agency: you pay the debt (or a settlement amount), and they agree to remove the collection from your credit report entirely.

Important: Read Before Sending

  • Never pay a collection without a written agreement first
  • Not all agencies will agree to pay-for-delete — but many will, especially for smaller amounts
  • Get the agreement in writing (email or letter) before sending any payment
  • Pay by certified cheque or bank draft — never share your bank account details directly
  • Keep copies of everything

When to Use This Letter

  • You have a collection on your credit report that you can afford to pay
  • You want the collection completely removed from your credit report (not just marked as "paid")
  • The debt is relatively small (under $5,000) — agencies are more likely to agree
  • You've already sent a debt validation letter and confirmed the debt is legitimate

The Template

[Your Full Name] [Your Address] [City, Province, Postal Code] [Date] [Collection Agency Name] [Agency Address] [City, Province, Postal Code] RE: Account #[Account Number] — Settlement and Deletion Proposal To Whom It May Concern, I am writing regarding the above-referenced account with an alleged balance of $[Amount Owed]. I am willing to resolve this matter by making a payment of $[Your Offer Amount] as full and final settlement of this account, subject to the following conditions: 1. DELETION FROM CREDIT REPORTS: Upon receipt of payment, your agency will request deletion of this account from all credit reporting agencies (Equifax Canada and TransUnion Canada) within 30 calendar days. This means complete removal of the trade line, not a status update to "paid" or "settled." 2. CONFIRMATION IN WRITING: Before I submit payment, I require written confirmation (letter or email) from an authorized representative of your agency agreeing to these terms. 3. RELEASE FROM LIABILITY: Upon receipt of payment, this account will be considered fully settled with no further balance owed, and no further collection activity will be pursued. 4. PAYMENT METHOD: Payment will be made by [certified cheque / bank draft] within 10 business days of receiving your written agreement. If your agency agrees to these terms, please provide written confirmation to the address above or by email to [Your Email]. If this offer is not acceptable, I am open to discussing alternative settlement terms that include deletion from credit reports as a condition. This letter is not an acknowledgment of the validity of this debt, nor a promise to pay. This is a conditional settlement offer only. Sincerely, [Your Full Name]

Negotiation Tips for Canadians

How much to offer

Start by offering 30-40% of the balance. Many agencies will accept 40-60%. The older the debt, the more likely they are to accept a lower amount.

Timing matters

Collection agencies are more willing to negotiate near the end of the month/quarter when they need to meet targets. Try calling first to discuss, then follow up with this letter.

"Paid" vs. "Deleted"

A collection marked "paid" still damages your credit score. Deletion completely removes it from your report as if it never existed. Always push for deletion.

If they refuse deletion

Some agencies won't agree to delete. In that case, negotiate for "paid in full" status (better than "settled" for your credit). You can also try calling back and speaking with a different representative.

Keep records of everything

Save all correspondence. If you call, note the date, time, representative name, and what was discussed. This protects you if there's a dispute later.

Need to validate the debt first?

Send a debt validation letter before negotiating payment.

Validation Letter

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This template is provided for educational purposes only and does not constitute legal advice. Laws vary by province. Consult a legal professional for advice specific to your situation.