Use this letter to help you negotiate a full and final settlement offer with your lender. Below, we've created an example of a debt settlement proposal letter that you can use as a guide.Your letter can be sent via your preferred contact method. The purpose of the letter is to describe why the borrower may not be able to make their mortgage, car loan, or other debt payments. Use this letter to help you negotiate a full and final settlement offer with a creditor. This program will help you write a letter that formally requests the money you are owed. This is called a Demand Letter. This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. Not sure about how to counter your creditor's debt settlement offer? Download this free Debt Settlement Offer Letter sample.