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.This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. Not sure about how to counter your creditor's debt settlement offer? Download this free Debt Settlement Offer Letter sample. You have 30 days to respond to a debt lawsuit in California. Crafting a debt settlement letter properly can help you get your creditors to accept your proposal. Learn how to write correctly one now. This is a template letter to your creditors requesting that they forgive your debt and write it off for compassionate reasons. Summary: Sued for debt?