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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, serving as a final warning before potential legal action. This video tutorial covers key aspects of payment demand letters and provides access to a free, official template. The importance of sending a demand letter lies in its role as a formal alert to the debtor, documenting the request and amount owed, and establishing a written record that could be useful in legal disputes. Additionally, the letter may offer a reduced settlement as an incentive for prompt payment. It is crucial for the demand letter to comply with relevant guidelines.