This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. This guide has forms and instructions to file an Answer to a debt lawsuit in Texas Justice Court (also called small claims court).We've settled debts with most major lenders. Here are examples of the letters we have sent that have worked for our clients. Print and fill out the appropriate form. You may mail the form or bring it in person to the Justice Court. Use this letter to help you negotiate a full and final settlement offer with your lender. State your offer to resolve your debt. •. Show them you are willing to participate in a Workout Solution. •. Complete Final Forms and Prepare for Court.