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Debt Forgiveness Letter Template | Sample

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Updated April 16, 2026

A debt forgiveness letter is a written statement that confirms a lender has decided to cancel and forgive all or part of a debt owed by a borrower. Once signed by the lender, it serves as official documentation that the borrower is no longer legally obligated to repay the specified amount.

Key Features

  • Officially closes a debt. Provides written evidence of the debt release, which should be kept by the borrower.
  • Tax documentation. Helps to properly show the IRS if the lender is taking advantage of any tax exclusions or deductions.
  • Use for credit purposes. If the debt was mentioned on the borrower’s credit report, the letter can be used to remove.

Sample

Download: PDF, MS Word, ODT

DEBT FORGIVENESS LETTER

 

[SENDER ADDRESS]

Date [DATE]

Dear [RECIPIENT’S NAME],

Our firm has contacted you in the past about your debt in the amount of $[AMOUNT] for [DESCRIPTION]. Due to extenuating circumstances combined with the amount of the debt you owe, we have taken it upon ourselves to completely relieve you of this debt.

YOUR DEBT HAS BEEN FORGIVEN IN FULL.

As we have cancelled your debt, please accept our letters in the future when we attempt to collect a debt. Thank you for being a loyal customer of ours.

Sincerely,

[SENDER NAME]

 

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