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A demand letter for payment is a formal request to a debtor for payment of an owed amount, specifying a deadline for payment. Collectors often use this as a final warning before initiating legal action. This video tutorial reviews key aspects of payment demand letters, including their legal importance. Sending one alerts the debtor of potential legal consequences and documents the reason for the demand, the exact amount owed, and the payment deadline. It also serves as evidence in case of disputes and can facilitate reduced settlement offers. The video provides information on where to obtain a free, official template for creating a demand letter.