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A demand letter for payment is a formal notice requesting that a debtor pay an amount owed by a specified date. It serves as a final warning before possible legal action. This video tutorial reviews key aspects of payment demand letters and provides access to a free official template. The demand letter is crucial as it notifies the debtor of the last effort to collect the owed money, alerts them to potential legal consequences, documents the reason for the demand, specifies the exact amount owed, and provides a written expression of the demand for potential court evidence. Additionally, it may offer a reduced settlement as an incentive for prompt payment.