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A demand letter for payment is a notice that requests payment from a debtor for an amount owed, demanding the payment by a specific date. It serves as a final warning before legal action is taken. Sending a formal demand letter is important as it notifies the debtor, records the reason for payment, specifies the amount owed, sets a due date, and provides a written record in case of legal disputes. A demand letter can also be used to offer a reduced settlement.
