Your debt settlement proposal letter must be formal and clearly state your intentions and what you expect from your creditors. 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. Crafting a debt settlement letter properly can help you get your creditors to accept your proposal. Learn how to write correctly one now. Our debt settlement agreement template helps to clearly outline repayment terms to reach a mutually agreeable solution. Here is a sample letter showing how to request a settlement of your debt. I am now experiencing financial hardship due reduced income. Get IRS tax news and sign up for e-News updates. Find information on Form 1040, tax relief, regulations, deadlines, tax guidance and more.