A credit card debt settlement letter allows you to settle your debt for an amount which is lower than the outstanding debt you owe to the creditor. You can mail this letter to any organization to which you owe a debt like a bank or credit card company. Through this letter, the debtor proposes an amount as the debt settlement amount. The creditor can accept the amount you proposed or can propose another debt settlement amount, which the creditor thinks is fair. After negotiating with the creditor, you can finally arrive at an amount which you and your creditor are comfortable with. You will be required to pay the lowered amount within a specific period of time as necessitated by the agreement you made with the creditor.