Below, we've created an example of a debt settlement proposal letter that you can use as a guide. Your letter can be sent via your preferred contact method.I am now experiencing financial hardship due reduced income. To make a debt settlement agreement, you should identify your debt owner, negotiate a settlement, and formalize the agreement in writing with all details. Use this letter to help you negotiate a full and final settlement offer with a creditor. The forms can be filled in on the computer. This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. The Debt Reduction Program provides eligible parents with past-due child support payments the opportunity to reduce the amount they owe to the government. What key details are required to complete a debt settlement agreement? A debt settlement letter is all you need to negotiate debts with your creditors.