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.Use this letter to help you negotiate a full and final settlement offer with a creditor. A debt settlement letter is all you need to negotiate debts with your creditors. It asks you to pay a certain settlement amount to the collection agency. Intheblanks form required for any matter originating and electronically filed in Supreme or Surrogate's Courts in Richmond County. A good debt settlement letter should be concise, thorough, and convincing enough to get a creditor to agree to your terms. Download this free sample of the debt settlement agreement template and know how to confirm the verbal debt settlement agreement in writing. Complete the claim in the same manner as a Defence and a Small Claim. Notice to Creditors (Attachment 7).