This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. Offer what you feel you can afford to pay and see if the collection agency is willing to accept.Use this sample debt settlement letter. If your lender agrees to settle a debt for less than you owe, you'll need a written agreement of the terms. When drafting a debt settlement letter, you'll want to include basic information, including your name and account number. Demand outstanding payment or action with our easy and customizable Demand Letter. Print or download your letter for free in minutes. Read our Mutual Release and Settlement Agreement template to understand our law firm's procedure in most settlements. The purpose of this letter is to request full reimbursement for my family's personal property that was destroyed (date of loss). Payoff of first mortgage loan. 103.