I am writing in regards to the above-referenced debt to inform you that I am disputing this debt. A debt settlement letter is a tool to negotiate with your creditors and settle your debt at a lump sum payment you're comfortable making.I can't afford your offer right now, so I'm going to contact them and see if they can settle for what I have." Inform the creditor that you will not be making payment until you receive an agreement letter to sign and send back. You have 30 days to respond to a debt lawsuit in California. 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. When a translation is complete, you assume the risk of any inaccuracies, errors or other problems encountered. Important things to know Some types of income are protected, or exempt, from a bank levy.