This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. List your name, account information, the original creditor of the debt, and the debt collection agencies identifying information.Your debt settlement proposal letter must be formal and clearly state your intentions and what you expect from your creditors. Are you looking for the best debt settlement letter? The letter will help you get results. You can use this letter to tell a debt collector that you receive income from Social Security or VA benefits. How to use this letter: Read the background below. Use this letter to help you negotiate a full and final settlement offer with a creditor. How to use this sample letter: 1. Read the background below. 2.