Legal Question in Credit and Debt Law in New York
A Final Payment of Debt
If you send a creditor a check that states at the bottom that it is the final payment of debt, and they cash that check, is it considered a legal document to finalize that debt?
3 Answers from Attorneys
Re: A Final Payment of Debt
Maybe. It should be explicit, such as "full payment of all monies due and owing through X date"
If the parties are in a dispute about the amount due, that often supports an argument that this is a final payment and discharges any other debt owed.
Re: A Final Payment of Debt
It should have stated "in full payment" not "in final payment".
Re: A Final Payment of Debt
No, it does not result in an accord and satisfaction of the debt. The front part of the check has a memo area and you can write whatever you want there...it has no legal meaning...If, however, you write that statement on the BACK of the check (where it gets signed by the party who is depositing/cashing it) it DOES have that effect. If the party who wishes to deposit the check wants to avoid that, they have to write that they are depositing the check with full reservation of rigths to proceed for the full balance due...also on the back.
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