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A demand letter for payment is a formal notice requesting payment from a debtor for an owed amount, specifying a due date. Typically used by collectors, it serves as a final warning before legal action may be initiated. This video tutorial reviews important aspects of payment demand letters and provides information on obtaining a free official template. The letter's primary purpose is to alert the debtor of potential legal consequences, document the reason for the demand, specify the exact amount due, and establish a written record for potential disputes. Additionally, it may offer a reduced settlement as an incentive for prompt payment.