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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 potential legal action. This video tutorial reviews crucial information regarding payment demand letters and provides access to a free official template. The primary function of the letter is to alert the debtor about possible legal consequences, document the rationale for the demand, specify the exact amount owed, and confirm the payment deadline. Additionally, it serves to create a written record for any future legal disputes and can present an option for a reduced settlement as an incentive for payment.