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Yes, it is the word 'illegal'. There isn't a federal or state statute requiring paper currency (or coins) to be used to pay off a debt. Debt doesn't disappear
by athms 7y ago
Yes, it is the word 'illegal'. There isn't a federal or state statute requiring paper currency (or coins) to be used to pay off a debt.
Debt doesn't disappear because an organization refuses to accept cash. They can accept cash. They can also accept chickens. While not a form of legal tender, a business can barter for goods and services. Organizations can also restrict certain forms of cash from being used. They refuse to accept anything higher than $20 bills or refuse to accept the entire payment in pennies.
Legal tender means that the note is honored and backed by the United States. The paper currency we know and love is actually called a Federal Reserve Note and should not to be confused with a United States Note, which is no longer in active circulation but it is still considered legal tender. In fact, the United States Note was called Legal Tender Note and a successor to Demand Notes which were printed during the Civil War. The Demand Note had a green back which is how the term greenback came into existence. Other forms of currencies have been issued and used as money includes Treasury Notes and National Bank Notes. Many state chartered banks also printed their own notes. You have to remember the Bureau of Engraving and Printing didn't exist until 1862 and the Federal Reserve until 1913.
- crazygringo 7y agoSo I did some more research and I think you're actually incorrect here about orgnanizations restricting cash from being used to pay off a debt (as opposed to purchasing goods/services), which is what I've been talking about all along. From the Federal Reserve: > This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. [1] In other words, yes, organizations can accept chickens or barter. But if you have a debt and you only want to pay cash, and they refuse it, then there's nothing they can do to compel you to pay in a different form. So again -- you're right there's no law against prohibiting cash payment for debt, but if a business can't collect otherwise, then for business purposes it's effectively a prohibition regardless. (Only difference being that a company can't be fined/punished for it, they just lose the value of the debt.) [1] https://www.federalreserve.gov/faqs/currency_12772.htm https://www.federalreserve.gov/faqs/currency_12772.htm