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.Not sure about how to counter your creditor's debt settlement offer? Download this free Debt Settlement Offer Letter sample. To dispute an invalid debt use this disputing debt sample letter. If you've fallen behind on your bills, especially credit cards, don't panic. You have 30 days to respond to a debt lawsuit in California. A good debt settlement letter should be concise, thorough, and convincing enough to get a creditor to agree to your terms. We'll walk you through how to put together a debt settlement letter that gets to the point and shows your creditors you're serious about sorting things out. This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain.