Debt Settlement Letter Template Due to financial difficulties, I am unable to pay the outstanding balance in full. 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. A wellwritten debt settlement letter is crucial to the debt negotiating process. 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. The first thing you need to do if and when you get sued is file an Answer. (B) a settlement offer; or. Rejecting party rejected the settlement offer.