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.This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. This guide contains information to help you respond to a breach of contract lawsuit, such as a lawsuit over a credit card or auto loan debt. Our debt settlement agreement template helps to clearly outline repayment terms to reach a mutually agreeable solution. • Barbara Vaughan Bechtold, SACOG. A good debt settlement letter should be concise, thorough, and convincing enough to get a creditor to agree to your terms. This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format. Submission of this attachment is mandatory.