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.This letter is in reference to the account number identified above and its outstanding debt. If your lender agrees to settle a debt for less than you owe, you'll need a written agreement of the terms. You may also ask for reimbursement of court costs. Is a debt collector pursuing you for an old debt you wish was long behind you? If so, you may try to settle the obligation. When drafting a debt settlement letter, you'll want to include basic information, including your name and account number. You must fill out this. Affidavit completely, and provide accurate information.