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A demand letter for payment is a notice requesting payment from a debtor for an amount owed. It specifies a payment deadline and serves as a final warning before potential legal action. This video tutorial reviews important aspects of payment demand letters and provides a free official template. Sending a demand letter is crucial for collectors as it formally alerts the debtor about the possibility of legal repercussions, records the payment request, and specifies the exact amount owed. It also serves as written evidence in potential legal disputes and can offer a settlement incentive. The demand letter should comply with specific legal guidelines.