This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. To make a debt settlement agreement, you should identify your debt owner, negotiate a settlement, and formalize the agreement in writing with all details.Here is a sample letter showing how to request a settlement of your debt. A debt settlement letter is a formal written communication between a debtor (the person or entity that owes money) and a creditor. Here's everything you need to know about drafting and filing an Answer to a credit card debt lawsuit, with sample Answers included. Use this letter to help you negotiate a full and final settlement offer with a creditor.