Posted: 1/30/2005 8:19:05 PM EDT
| If you receive a check with 'paid in full' in the memo section, would you cash the check even though you are not sure the debt is indeed paid in full? Does your signature on the check release the check writer of further obligations? |
I believe it does. Some people write microscopic shit on that line. |
I would cross the memo out if I'm not sure. I do write that occassionally on my own checks to get a point acrossed with idiots I'm forced to deal with occassionally. Patty |
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Ok this is a serious post I can't see if someone owes you 10000.00 and they mail you a check for 5000.oo and mark it payed in full that ANY court would allow that. Alot of companies deposit checks sometimes days before a recievables clerk could see if the check was "payment in full". Oh and it would constitute fraud on the part of the check writer. |
What if they wrote where it's endorsed on the back "by depositing this check you are agreeing that all monies are paid in full"? |
| Most major businesses use automated systems during parts of the processing of checks. I am sure they would not be held liable to words on a memo line as they could argue that it could readily be missed. Crossing out remarks on a memo line would make me a little more leary though because then you have proved that you read the memo yet cashed the check anyway. |
OK I'll play what if. What if the check that stated all monies payed in full was for rent. Did you just buy the building?? Come on, you are smarter than this.....I have read plenty of your posts. |
Claim: A debtor can discharge his obligations by sending his creditor a check made out for a fraction of the amount owed with the words 'Paid in full' written on it. Status: False. Origins: "Get rich quick" (or, in this case, "get poor more slowly") schemes never seem to lose their appeal, even though common sense should warn that if getting rich quickly were truly so easy, everyone would be wealthy. Obviously, if getting out of a debt were as simple a matter as executing the method described above, no one would ever lend money or extend credit. Nonetheless, these schemes maintain their hold on the public because people are willing to entertain the fiction that they're a form of "secret knowledge" -- that such loopholes do exist because only a select few are smart enough to know about and take advantage of them. It's not uncommon for creditors to agree to settle debts for less than the full amount due. After all, some payment is better than none, and if debtors can be encouraged to pay at least a portion of their debts back through promises that they will relieved of any further financial obligations towards their creditors, then both sides come out ahead. Better to accept a fraction of what you're owed than to risk your debtor's declaring bankruptcy or choosing to pay off other debts instead, leaving you with nothing. For such arrangements to be valid, however, both sides must agree to them. A debtor cannot unilaterally declare a partial payment to be "payment in full" simply by attaching a note with those words to his check or writing them in the memo field and assuming that if the creditor fails to notice the notation then the entire debt has been discharged: This "paid-in-full" nonsense has achieved the status of urban legend, says J. Scott Bovitz, a Los Angeles bankruptcy lawyer. A creditor sometimes will reduce a claim for a disputed payment, but this kind of settlement usually won't happen if the debtor acts in bad faith, Bovitz says. The act of writing "paid in full" on a $10 check pretty much defines the term "bad faith." Section 3-311 of the Uniform Commercial Code does state that a debt can be discharged with a check designated as payment in full "if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim." However, it's up to the claimant to prove "that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim." So if you receive a check marked "paid in full" made out for less than the amount you have agreed upon, you'd best not cross out the words "paid in full" or write "disputed" on it and cash it anyway, as you risk having the entire debt discharged. However, this condition does not apply to "transactions conducted or performed, in whole or in part, by electronic means or electronic records, in which the acts or records of one or both parties are not reviewed by an individual in the ordinary course [of business]," which means that this scheme will not work at all for most bill or credit card payments, as those payments are typically handled by automated systems and not humans. |
Plus, it would betray the check-writer as a huge fraud, cheapskate, crook, scoundrel and overall ne'er-do-well. |
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I was hoping that someone knew what the law was regarding this in VA. I will ask at the bank or if necessary contact a lawyer. Section 3-311 of the Uniform Commercial Code does state that a debt can be discharged with a check designated as payment in full "if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim." However, it's up to the claimant to prove "that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim." So if you receive a check marked "paid in full" made out for less than the amount you have agreed upon, you'd best not cross out the words "paid in full" or write "disputed" on it and cash it anyway, as you risk having the entire debt discharged. However, this condition does not apply to "transactions conducted or performed, in whole or in part, by electronic means or electronic records, in which the acts or records of one or both parties are not reviewed by an individual in the ordinary course [of business]," which means that this scheme will not work at all for most bill or credit card payments, as those payments are typically handled by automated systems and not humans. I found this info also when I researched. According to this even if I write disputed or cross the memo out, it may still release the person from further obligation. This depends on state laws, I think. |