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.This article will make the process of responding to a debt lawsuit a little bit easier and tell you how to answer a summons for debt collection in Texas. 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). Use this letter to help you negotiate a full and final settlement offer with your lender. Not sure about how to counter your creditor's debt settlement offer? Download this free Debt Settlement Offer Letter sample. Be prepared to provide documentation of your financial situation, such as pay stubs, tax returns, and bank statements.