This letter is in reference to the account number identified above and its outstanding debt. 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. 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. If your lender agrees to settle a debt for less than you owe, you'll need a written agreement of the terms. Our debt settlement agreement template helps to clearly outline repayment terms to reach a mutually agreeable solution. Keep it simple, and the results will likely be the best they can be. A hardship letter can keep you out of debt. To feature what they want to highlight, where the resume does not allow it.