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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. It serves as a final warning, indicating that failure to pay may lead to legal action. This video tutorial covers essential information about payment demand letters, including a free official template. The importance of sending a demand letter lies in its ability to alert the debtor about possible legal consequences and document the request in writing. This letter details the amount owed, specifies a due date, and can be crucial in any future legal disputes. Additionally, it may serve as a basis for offering reduced settlement options to encourage payment.