This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. You have 30 days to respond to a debt lawsuit in California.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. If you decide to file an answer and the complaint alleges a breach of contract as a cause of action, you need to complete form PLDC010. Want to settle your debt? A good debt settlement letter should be concise, thorough, and convincing enough to get a creditor to agree to your terms. Specify that the proposed payment will work as a complete settlement for the entire debt. For example, under Title VI and the Safe Streets. This Agreement will then be filed as part of.