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.Learn how to write an effective collection dispute letter with our guide and templates. 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. 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. A demand letter is written notice to the debtor that includes a formal demand for payment of the debt.