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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. It serves as a final warning before potential legal action, commonly used by collectors. The video tutorial reviews important information on payment demand letters and provides a free official template. Sending a demand letter is crucial as it notifies the debtor of the final attempt to collect funds, alerts them to the possibility of legal action, records the reason for the demand, clarifies the exact amount owed, establishes a written demand for any future legal disputes, and can offer a reduced settlement as an incentive for payment.
