A settlement demand letter is a written request to the party responsible for your injury or loss to pay you a fair amount of money without going to court. 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. Use this letter to help you negotiate a full and final settlement offer with your lender. Figure out a realistic offer before beginning your letter. The demand letter is your first chance to make your case and position yourself for a fair settlement. Your creditor may be willing to accept a lower settlement than the one offered in the letter. Please understand that this is my prefiling settlement demand. If I am forced to file a lawsuit, I'll ask a jury to award substantially more. If you fill out a form on a webpage, you will lose your progress.