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A demand letter for payment is a notice requesting payment from a debtor for an amount owed by a specific date. It serves as a final warning before legal action. Sending this letter is important as it notifies the debtor, records the payment demand, informs the amount owed, sets a due date, and provides a written record for legal purposes. It can also be used to offer a reduced settlement. A free and official template can be found to ensure compliance with requirements.