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.Want to settle your debt? Crafting a debt settlement letter properly can help you get your creditors to accept your proposal. Learn how to write correctly one now. A good debt settlement letter should be concise, thorough, and convincing enough to get a creditor to agree to your terms. Use this letter to help you negotiate a full and final settlement offer with a creditor. The first step in a debt settlement negotiation with a bank, credit card company, or collection agency is to confirm the debt belongs to you. Our debt settlement agreement template helps to clearly outline repayment terms to reach a mutually agreeable solution. Explain that you are unable to pay the debt due to (detail your hardship). •.