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A demand letter for payment is a formal request for payment from a debtor, outlining the amount owed and a specific due date. It serves as the final warning before potential legal action. This video tutorial covers essential information about demand letters and offers a free official template. Sending a demand letter is crucial as it alerts the debtor to legal consequences, records the reason for the payment, specifies the exact amount owed, and provides written documentation in case of disputes. It can also be used to present a reduced settlement offer. The demand letter must adhere to specific guidelines.