This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. To dispute a debt, you must write a letter to the debt-collection agency within 30 days of their initial contact with you.Your debt settlement proposal letter must be formal and clearly state your intentions and what you expect from your creditors. Use this letter to help you negotiate a full and final settlement offer with a creditor. Not sure about how to counter your creditor's debt settlement offer? Download this free Debt Settlement Offer Letter sample. The party owed should include language that motivates the debtor to make payment. You need to fill out a form to be considered for "Poor Person Relief. As full payment and satisfaction of the Present Debt. Most courts even have forms you can fill out to respond to the suit.