Can I legally pay off a debt in pennies or can the payment be refused?

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Can I legally pay off a debt in pennies or can the payment be refused?

Asked on July 11, 2011 under Bankruptcy Law, Arizona

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Pennies are still legal tender, as much as people may wish otherwise. They therefore may be used to pay any debt, *unless* the instrument creating the debt, any other agreements between the parties (such as an agreement to settle the debt or schedule payment), etc. either states that pennies may not be used or specifically sets out how the debt must be paid (e.g. by money order). That's because such agreements are completely enforceable and legal. Note also that while a party cannot refuse to accept pennies, other than as per the above, they may be able to then impose on you any costs they incur in accepting the pennies, the same as they could impose on you the cost for a bounced or bad check if you paid initially by one of those; in this case, if they had to use a commercial coin machine to count, etc. the pennies and it takes a portion of the payment as its fees, they could possibly seek to recover that fee from you or consider the debt not paid in full until you pay that fee, too.


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