This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. Your debt settlement proposal letter must be formal and clearly state your intentions and what you expect from your creditors.A payment plan agreement outlines an installment plan to repay an outstanding balance over a specified time frame. To make a debt settlement agreement, you should identify your debt owner, negotiate a settlement, and formalize the agreement in writing with all details. Our debt settlement agreement template helps to clearly outline repayment terms to reach a mutually agreeable solution. With doityourself debt settlement, you negotiate directly with your creditors in an effort to settle your debt for less than you originally owed.