This article will explain how to handle debt settlement on your own and how to write the best debt settlement letter possible. I am now experiencing financial hardship due reduced income.Use this letter to help you negotiate a full and final settlement offer with a creditor. Our debt settlement agreement template helps to clearly outline repayment terms to reach a mutually agreeable solution. Not sure about how to counter your creditor's debt settlement offer? Download this free Debt Settlement Offer Letter sample. When drafting a debt settlement letter, you'll want to include basic information, including your name and account number. 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. Get IRS tax news and sign up for e-News updates.