A formal demand letter is an important first step in the debt collection process because it gives the debtor notice that an attorney is involved in the matter. 1. In the sample letter, fill in your personal information.Learn about programs and organizations that give free legal advice and may help you find a free or lowcost attorney. The official home page of the New York State Unified Court System. We hear more than three million cases a year involving almost every type of endeavor. A debt collection letter informs clients about their unpaid bills. This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. Letters from attorneys on their face, without more, do not constitute suit. The letter will usually explain that they are requesting debt. Here is a sample of successful dispute letter I've used in the past for clients.