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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, often serving as a final warning before legal action is taken. This video tutorial covers essential details about payment demand letters and provides access to a free official template. The primary significance of sending a demand letter lies in its role as a final collection attempt, informing the debtor of potential legal consequences. It documents the reason for the payment demand, specifies the exact amount owed, and establishes a payment deadline. Additionally, it serves as written evidence for any future legal disputes and can facilitate a reduced settlement offer as an incentive.