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A demand letter for payment is a notice requesting payment from a debtor for an amount owed by a specific date. It serves as a final warning before legal action. Sending this letter is important as it alerts the debtor of potential legal consequences, records the reason for the payment, specifies the amount owed, sets a due date, and provides written evidence in case of disputes or court action. It can also be used to offer a reduced settlement. You can find a free official template online.