This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. Learn how to write an effective collection dispute letter with our guide and templates.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. Here is a quick template for those looking to send a settlement offer to a collection agency or Pay for Delete. After being served, I settled the debt with the collector. Not sure about how to counter your creditor's debt settlement offer? Download this free Debt Settlement Offer Letter sample. How to use this sample letter: 1. Read the background below. 2.