As the name implies, a Payment Demand Letter is primarily used as a means to compel a party to pay a debt. This type of demand is typically sent if: (1) the Claimant does not have Lien rights and therefore cannot file a Lien; (2) the amount in controversy is too small to justify filing a lawsuit, but the Claimant does not want to forego the amount owed without first making an attempt to collect the debt; (3) the amount in controversy is substantial enough to file a lawsuit, but the Claimant desires to make one last attempt at resolving the dispute before the lawsuit is filed; and/or (4) the Claimant is required to provide the other party with formal Notice before a lawsuit can be legally filed, e.g., CPRC Section 38. Typical statutes referenced in a Payment Demand Letter include violation of the Prompt Payment Act and the right to recover interest at 18% a year on the principal amount and attorneys’ fees, violation of the Trust Fund Statute if Project funds have been diverted from the Project, and reimbursement of attorneys’ fees under CPRC Section 38. A Payment Demand Letter is a cost-efficient method for compelling payment of a construction debt.