Your debt settlement proposal letter must be formal and clearly state your intentions and what you expect from your creditors. Review multiple versions with different use cases depending on your needs.Use this letter to help you negotiate a full and final settlement offer with a creditor. Our debt settlement agreement template helps to clearly outline repayment terms to reach a mutually agreeable solution. This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. A debt settlement agreement in the United States is an agreement between a lender and a borrower to handle a debt for less than the full amount owed. Free sample letters for writing to creditors. Write a letter of authority, cancel a continuous payment, or tell a creditor a debt is statute barred. This article will make the process of responding to a debt lawsuit a little bit easier and tell you how to answer a summons for debt collection in Texas. I am now experiencing financial hardship due reduced income.