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.Not sure about how to counter your creditor's debt settlement offer? Download this free Debt Settlement Offer Letter sample. Make it clear to the creditor that you intend to pay the debt. •. Explain that you are unable to pay the debt due to (detail your hardship). Our debt settlement agreement template helps to clearly outline repayment terms to reach a mutually agreeable solution. 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. Free sample letters for writing to creditors.