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A demand letter for payment is a formal notice requesting payment from a debtor for a specific amount owed, typically serving as a final warning before potential legal action. This video tutorial reviews key information about payment demand letters and provides access to a free official template. The importance of sending such a letter lies in its ability to alert the debtor to possible legal consequences, document the reason for the payment demand, specify the amount due, and set a deadline for payment. Additionally, a demand letter can serve as written evidence in case of disputes and may offer a reduced settlement as an incentive for prompt payment.