Below, we've created an example of a debt settlement proposal letter that you can use as a guide. Your letter can be sent via your preferred contact method.This program will help you write a letter that formally requests the money you are owed. This is called a Demand Letter. Use this letter to help you negotiate a full and final settlement offer with your lender. 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. You have 30 days to respond to a debt lawsuit in California. In this section, you can find information and answers to the following questions: 1. What happens after appointment?