Sample I Owe You Letters

10+ Sample I Owe You Letters

What is an I Owe You Letter?

IOU (phonetic acronym for I Owe You) is a sworn statement that you owe a debt to someone. I owe you means you are in debt with someone.  Even at the time of the 18th century, people were starting to use IOU. It is an informal written document that can be binding and be brought into the court of law. It contains the amount of the debt, how it is going to be paid, the installments schedule, the interest if there is any, the guarantor if there is someone you can find, and the signature of the borrower and the lender.

Sample of an I Owe You Letter

I, Robert Rock, a debtor, hereby certify and acknowledge that I owe an amount of three thousand dollars in words ($3,000) to my creditor, Mary Phillips on the date of June 2, 2019. I will pay the creditor in terms of months in five months, having this debt due on August 2, 2021. I acknowledge my responsibility to pay the creditor on the said dates. I have Chloe Adams as my guarantor in case I failed to give the payments.

I hereby certify this contract signed on the second day of June 2019.

Signature of Debtor                                                           Signature of Creditor

Signature of Witness

Why is an IOU Letter Essential?

We may not think it necessary to have an IOU letter but it is not true. It has benefits.

The creditor will trust you. With IOU, you can prove that you are sincere about paying your debt. It means that you will not run away from your debt. The creditor will have proof to demand from you the payment, so the creditor will have nothing to worry about.The debt will be clear. As all the important details are stated in the IOU, all things will be clear. Both parties will know what to do after the debt has been made. The creditor will not worry about when the debt will be paid. You both will have something to look back into.Disputes will be avoided. Because there is an IOU and things are clear, no dispute will likely arise. The creditor can expect the money to be paid at the due date because there is a written agreement where they could demand for the payment more better. Both parties will keep according to their word because the agreement has their signature.The agreement will be formal. The agreement will not be merely by words. You will have a contract to follow.You can easily make a debt. The creditor will lend more easily if they would have something to hold against you in case of nonpayment.

Steps in Writing an IOU Letter

As money can be hard, you may need these steps on how to make an IOU letter.

Step 1 Mention the name of the debtor and the creditor.

Designate the name of the borrower as the “Promisor”. Put it every time it is mentioned in the text. While the name of the lender is the “Promisee”. Write the full name of each party.

Step 2 State the important details.

You must clearly cite the amount of debt by putting it in words and in numbers. Be also clear on how you will want to pay the money owed. If you want to pay in installments, state in your letter. Be clear on when you want to finish paying your debt.

Step 3 Legally bind the agreement with signatures.

End the letter with the signature of the borrower and the lender. State the date that the contract is written and signed. The signatures will make it legally binding.

FAQs

How Will I Write an IOU Letter?

You can have a handwritten IOU letter or have it typed upon your computer and have a printable copy. You can have it in any sort, even written in a proverbial napkin. Today, IOU letters are in various forms. You can access an IOU template on the internet.

Can You Give Me an Example of an IOU Letter?

Let us say you need to rent an apartment. You do not yet have the money to pay for it. You will plead from the owner and will give an IOU letter. Let us say that you will owe the creditor $500 and you can pay it in 5 months. You will put that in your letter and acknowledge your debt. You will sign the document and make the creditor sign it also. That is an example of an IOU letter.

IOU is a legal document. There is a dispute on how legal it is. Some think it is not binding. That the debtor can get loose and just run away with their debt. But this agreement can be introduced into the court of law. The creditor can get the money back through legal procedures.

Will I Have to Notarize an IOU?

No, there is no need. You can use the IOU without it being notarized. Though, to make it enforceable, authorities suggest notarizing it to get it a seal. It makes the agreement formal with a witness. The creditor also will easily win in court in case of nonpayment.

Knowing now how to make an IOU letter, you can have a loan more easily. Just do not forget the important details. Now that you can make debts, the only important thing is to be responsible on how to pay it. Think that the creditor can bring you into court and you will not want it. Pay our debts accordingly.