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.Your debt settlement proposal letter must be formal and clearly state your intentions and what you expect from your creditors. 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. Use this letter to help you negotiate a full and final settlement offer with a creditor. When drafting a debt settlement letter, you'll want to include basic information, including your name and account number. I filled out an application and gave USDS all of my medical bills and credit card information. The National Consumer Law.