A Question about Money

Some time ago Cecil discussed the fact/myth that, and I’m paraphrasing here, if there is a debt to be paid, and the creditor refuses to accept legal US currency as payment for that debt, then that debt is forgiven. Thus it’s conceivable that I could pay my electric bill with tens of thousands of pennies, and if the clerk didn’t like it, free A/C for the previous month!

I don’t believe that Cecil gave a conclusive answer to this question. What’s the latest? Anybody with ties to the Treasury Department or banking industry know about this?

The debt is not forgiven. No way. I can’t believe this.

running to the bank to trade in check for tousands of pennies

Yer pal,

I seem to recall that coins don’t fall into the ‘legal tender’ category the same way bills do. If this is correct, the clerk who doesn’t want to take a bag of pennies for a 6-pack doesn’t have to.

Years ago, on one of those kiddie educational/informational shows, I was told that store clerks only have to accept 25 cents-worth of pennies. Beyond that, they can claim that the pennies don’t constitute legal tender. And yes, this is to stop little old ladies from paying for $100 of merchendise with 10 coffee cans full of Lincolns. Presumably, there are similar limits for other coins.

“I had a feeling that in Hell there would be mushrooms.” -The Secret of Monkey Island

Yeah, but nowadays they have coin-counting machines in the supermarkets, so you could take the cans of pennies and dump 'em in and get an exact count. Of course, they charge 8% for this privilege.

Irks me no end, that people are stupid enough to pay 8% for a machine to count their coins.

I don’t believe there is any “law” about accepting pennies. It seems to me that it is all a private transaction.

If you owe me $100 and you come to me with 10,000 pennies unrolled, I will most likely say to you, “Come back with a check or some bills.”
You can say, “Fine, I’m only going to pay you this way.”
I’ll retort, “See you in small claims court.”

I bet that the judge will make you give me a check or cash.

Are you kidding, Dex? I consider the 8.9% some of the best money I spend. While I find time to post here all too frequently, I do not have time to go to the bank to get sleeves, sit in front of the TV counting coins, and go back to the bank to deposit the proceeds.

When Coinstar finally came to my neighborhood, I schlepped to the supermarket four times before I finally got rid of all the coins that had collected in my house. Got about $500, too. I was happy to part with 40+ bucks to turn all that dead weight into money. Now I drop by every couple-three weeks and pick up enough real money to buy a weekend’s beer and cabfare.

Livin’ on Tums, Vitamin E and Rogaine

This is an interesting question. It would be fun to find a whole answer!

As far as I can tell, there is no federal law that requires creditors accept from debtors any particular form of money. However, at 51 USC Sec. 5103, it says:

Now, in general, the idea of ‘legal tender’ is that it is tender that must be accepted in payment of debt. But the concept has gone fuzzy over the years, as ‘fiat’ money has become accepted without the need to force its acceptance. See, for example, in Australia: http://www.rba.gov.au/poly/po_legal.html

and in Scotland: http://www.scot.demon.co.uk/scotfaq/1_7.html .

I found the following statute in Missouri:

But this provision is the only indication of ‘legal tender’ in Missouri, and is buried in a chapter of its Revised Statutes that deals with interest and usury.

The US Constitution allows Congress to “coin Money, regulate the Value thereof,” (Article I, Sec. 8) and the states are prohibited from coining money (Art. I, Sec. 10). Also, no state shall “make any Thing but gold and silver Coin a Tender in Payment of Debts” (Art. I, Sec. 10), presumably the basis for Missouri’s Sec. 408.010.

If anyone has any statute of which they are aware, and for which they can provide a citation, please do! As near as I can tell, in most of this land of ours, you don’t have to accept any particular form of money for payment of a debt.

As noted at the Australia site, there may be legal consequences beyond the question of ‘legal tender.’ Thus, if you refuse payment by what is accepted as money, having previously failed to set the terms of what you would accept, you may have difficulty if you were to sue for payment later.

Manhattan wrote

Did you ever consider the idea of possibly spending some of that change before it accumulates?

When your bill comes to something like $19.29, do you insist on paying with dollar bills and getting 71 cents – five coins --for your collection? Next time, give him four pennies, and you’ll get three quarters back, a net loss of one coin. Or a quarter and a nickel, and you’ll get just one cent back, again, a net loss of a coin.

Two points

IIRC from CA column there were two laws passed one saying you have to take coins the other no. And that is were it was left. Undecided.

Also, what kind of bank still will count pennies for you and not charge. None in my neighborhood. (I live in Chicago-Name me a bank [that’ll do this if you don’t have an account] and I’ll be there)

Here’s the situation in Canada (from the Currency Act, Revised Statutes of Canada, 1985, c. C-52):

  1. (1) Subject to this section, a tender of payment of money is a legal tender if it is made
    (a) in coins that are current under section 7; and
    (b) in notes issued by the Bank of Canada pursuant to the Bank of Canada Act intended for circulation in Canada.

(2) A payment in coins referred to in subsection (1) is a legal tender for no more than the following amounts for the following denominations of coins:
(a) forty dollars if the denomination is two dollars or greater but does not exceed ten dollars;
(b) twenty-five dollars if the denomination is one dollar;
© ten dollars if the denomination is ten cents or greater but less than one dollar;
(d) five dollars if the denomination is five cents; and
(e) twenty-five cents if the denomination is one cent.

(2.1) In the case of coins of a denomination greater than ten dollars, a payment referred to in subsection (1) may consist of not more than one coin, and the payment is a legal tender for no more than the value of a single coin of that denomination.

(3) For the purposes of subsections (2) and (2.1), where more than one amount is payable by one person to another on the same day under one or more obligations, the total of those amounts is deemed to be one amount due and payable on that day.

(4) A coin that has been called in is not legal tender.