This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. Your debt settlement proposal letter must be formal and clearly state your intentions and what you expect from your creditors.Inquire about payment and if necessary, help them set up a payment plan. Our debt settlement agreement template helps to clearly outline repayment terms to reach a mutually agreeable solution. "Generate a free Debt Validation Letter to ascertain the legitimacy of your debt. Not sure if you owe? Also includes sample letters to debt collectors. To make a debt settlement agreement, you should identify your debt owner, negotiate a settlement, and formalize the agreement in writing with all details. Before making a settlement offer, be sure you have enough money saved up to meet the settlement terms if the creditor agrees to your terms. A settlement letter is a written offer from a creditor to settle a debt, and serves as legal documentation of this arrangement.