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A demand letter for payment is a formal notice requesting a debtor to pay an owed amount by a specific date. Typically used by collectors, it serves as a final warning before legal action may be pursued. This video tutorial covers vital information about payment demand letters and offers access to a free official template. Sending a demand letter is important because it notifies the debtor of potential legal consequences, documents the payment request, specifies the owed amount and due date, and provides written evidence for any future disputes, which could aid in court. Additionally, it may present an opportunity for a reduced settlement.