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A demand letter for payment is a formal notice requesting a debtor to pay an owed amount by a specified date, serving as a final warning before potential legal action. This video tutorial reviews the key aspects of payment demand letters and provides access to a free official template. Sending a demand letter is crucial as it alerts the debtor to the risk of legal consequences, documents the reason for the payment, specifies the exact amount due, and can be utilized in court if disputes arise. The letter also offers a potential reduced settlement as an incentive for payment. It's important that the demand letter adheres to certain guidelines.