Avoid debt-settlement companies that require payment in advance of obtaining the promised settlement. Your debt settlement proposal letter must be formal and clearly state your intentions and what you expect from your creditors.This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. The party owed should include language that motivates the debtor to make payment. Not sure about how to counter your creditor's debt settlement offer? Download this free Debt Settlement Offer Letter sample. Our debt settlement agreement template helps to clearly outline repayment terms to reach a mutually agreeable solution.