This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. 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. When drafting a debt settlement letter, you'll want to include basic information, including your name and account number. A hardship letter explains to a lender the circumstances that have made you unable to keep up with your debt payments. I respectfully request that you provide me with the following: 1. The amount of the debt;. 2. This Agreement is for the negotiation and compromise of a debt under the following terms and conditions: The Parties. How to use this sample letter: 1. Read the background below. 2.