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.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. Use this letter to help you negotiate a full and final settlement offer with a creditor. Download a free pdf version of sample letters to dispute with credit bureaus and negotiate a payment plan with creditors. When drafting a debt settlement letter, you'll want to include basic information, including your name and account number. I am now experiencing financial hardship due reduced income. The hearing date, and proof of notice shall be filed in the form of a statement of the names and addresses of the persons notified.