An IOU (
abbreviated from the phrase "I owe you") is usually an informal document acknowledging
debt. An IOU differs from a
promissory note
A promissory note, sometimes referred to as a note payable, is a legal instrument (more particularly, a financing instrument and a debt instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of ...
in that an IOU is not a
negotiable instrument
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a ...
and does not specify repayment terms such as the time of repayment. IOUs usually specify the debtor, the amount owed, and sometimes the creditor. IOUs may be signed or carry distinguishing marks or designs to ensure authenticity. In some cases, IOUs may be redeemable for a specific product or service rather than a quantity of
currency, constituting a form of
scrip.
California Registered Warrants
Also referred to as "IOUs" by the
U.S. state of
California, the term "
Registered Warrants", which specify a future payment date, is meant to differentiate these IOUs from regular, or “normal” payroll warrants which permit the holder to exchange their warrant for cash immediately. For both types of warrants, redeeming them may be delayed until funds are available. Because of this uncertainty, warrants are not negotiable instruments. Registered Warrants were issued in July 2009
due to a temporary inability of the state of California to redeem its warrants.
Warrants are issued as payment to state employees, private businesses, local governments, taxpayers receiving tax refunds, and owners of unclaimed money.
References
External links
Debt
Personal finance
{{Finance-stub