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Fillable Form Debt Release Letter

Debt Release Letter is a receipt sent to a debtor and any third parties to inform that outstanding debts were already settled. Usually sent after final payment as proof to the credit reporting agency.


What is a Debt Release Letter?

The Debt Release Letter — for Final Payment, is created by a creditor after a debt has been paid to apprise the debtor and any third party that outstanding debts were already settled.

A Debt Release Letter is a receipt usually sent after the final payment as proof to the credit reporting agency. It is a reference for them to remove the debtor's collection in their credit report.

What is the difference between a creditor and a debtor?

Creditor and debtor are accounting terms referring to lending arrangements. A creditor pertains to the person or entity that lends money or extends credit to another party. A debtor, on the other hand, is the one who is in debt.

A creditor usually demands collateral or loan covenants from the debtor to ensure that the latter will pay the debt. Thus, the creditor will take hold of the lien until the debtor fulfills the financial obligations.

However, if lending transactions are in cash, terms creditor and debtor may not be applicable. You may only be called as such if the transactions are in the form of loans payable or trade accounts payable.

What is a credit reporting agency?

A lending agreement between two parties is safer with a credit reporting agency. A credit reporting agency or credit reporting bureau maintains the credit history of individuals or entities. They partner with lenders and manage credit information including calculating credit scores and providing credit reports.

Creditors work with the credit reporting agency to receive information about a borrower’s debt history. The customized information furnished by the credit reporting agency influences the credit decision.

Furthermore, creditors and debtors must partner with a credit reporting agency to track down their debt arrangement. A Debt Release Letter functions as a receipt that notifies the credit reporting agency about the fulfilled debt so they can clear the collections from their credit report.

What is the purpose of a Debt Release Letter?

A Debt Release Letter may be used as follows:

  1. Confirmation. As a debtor, a Debt Release Letter serves as a confirmation that your account has been paid in full. It is also a legitimate document used to clear your debt records in any credit reporting agency.
  2. Formality. Writing a letter is a formal way to end or start an agreement. Therefore, sending a Debt Release Letter remarks the fulfillment of the agreement between you and the creditor.
  3. Protection. Any form of agreement shall be backed up with written documents. This is to secure both parties in case of disputes. A Debt Release Letter protects you from any charges when your settled debt is still reported as open in your credit report. Wherein, this letter states that creditors must refrain from making any more claims regarding the debt. Otherwise, actions will be considered harassment reportable to the State Attorney General’s office or the Federal Trade Commission.

Where to report debt disputes?

If a dispute emerges between you and the creditor after fulfilling your debt, you must report to a State Attorneys General’s office. The attorneys general are the “People’s Lawyer” in the United State.

Some of the responsibilities of attorneys general involve managing disputed debt cases, investigating criminal operations, looking into scams targeting seniors, violations of the state’s clean air and water laws, and evaluating whether mergers break antitrust laws.

Every state in the U.S. has assigned top legal officers who advise and represent their legislature and state agencies. Visit the official website of the United States government to find the appointed attorney general in your state.

What is the law that protects a debtor?

A responsible debtor must not be abused that is why the Fair Debt Collections Practice Act (FDCPA) was created.

It is designed to protect you from any unethical and unlawful debt collecting practices. It is part of the Consumer Credit Protection Act.

The Consumer Credit Protection Act (CCPA) is a piece of federal legislation that protects debtors against corrupt creditors, banks, and credit card companies. It is a law passed in 1968 that requires lenders to explain the actual cost of borrowing money in terms the debtors understand.

The FDCPA remarks these fair rules that third-party debt collection agencies must follow. These rules may protect you from the debt collector’s unethical behaviors.

  • Debt collectors must refrain from conducting excessive communication or harassment that intends to intimidate you. This includes no calling before 8 a.m or after 9 p.m.
  • Debt collectors must avoid being deceptive about the amount of your debt nor fake a debt that does not exist. It is your right to request a verification of the actual debt.
  • Debt collectors are not allowed to obtain your information and discuss debt without the debtor’s permission.
  • Debt collectors must introduce themselves when calling.
  • Debt collectors must furnish you with a validation of the debt when requested.
  • Debt collectors must not threaten you or use aggressive and obscene language.
  • Debt collectors must not ignore your requests to cease the communication.
  • Debt collectors must not force you to accept their call on your workplace.

How to fill out a Debt Release Letter?


This contains the sender and recipient’s information.



Enter your name.


Enter your street address or post office box number.

City, State, ZIP

Enter your city, state, and ZIP code.



Enter the recipient’s name.


Enter the recipient’s street address or post office box number.

City, State, ZIP

Enter the recipient’s city, state, and ZIP code.


Enter the filling date.


This contains the body of your letter.

Payment Amount

Enter the amount of your payment next to the dollar sign.

Account Holder’s Name

Enter the account holder’s name.

Account Number

Enter the account number.



Enter your signature over your printed name.

How to file a Debt Release Letter?

Send the Debt Release Letter to your creditor and the credit reporting agency upon fulfilling your final payment. This is to inform them that you no longer owe the creditor and for the credit agency to clear your credit report.

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