This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. 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. How to use this sample letter: 1. Read the background below. 2. This article will make the process of responding to a debt lawsuit a little bit easier and tell you how to answer a summons for debt collection in Florida. Debt Settlement is when a lender or creditor agrees to accept less than the full amount of debt owed and consider the debt paid off. Here is a quick template for those looking to send a settlement offer to a collection agency or Pay for Delete. Want to settle your debt? Debt collection laws also give creditors legal tools to collect money damages awarded in a final judgment.