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A demand letter for payment is a notice requesting payment from a debtor for an amount owed by a specific date. It serves as a final warning before legal action. Sending a demand letter is important as it alerts the debtor to potential legal consequences, records the reason for payment, states the amount owed, sets a due date, and provides written evidence for any legal disputes. It can also be used to offer a reduced settlement. Get a free template and learn more in this video tutorial.