If you reject a settlement offer, or fail to keep up with a payment arrangement, your creditor might take you to court. This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain.To fill out this letter, clearly write your name and address at the top. Include the date and the collection agency's name and address. A demand letter is written notice to the debtor that includes a formal demand for payment of the debt. Here is a quick template for those looking to send a settlement offer to a collection agency or Pay for Delete. This article will explain how to handle debt settlement on your own and how to write the best debt settlement letter possible. Because of this and because of unanticipated changes in the law, the Rural Law Center of New. Fill in your information on the template letter and edit it as needed to fit your situation. 3. Print and mail the letter.