IOU facts for kids

An IOU is a simple way to say "I owe you." It's usually an informal document that shows someone owes money or something else to another person. Think of it like a quick note or a promise.

IOUs are different from a more formal document called a promissory note. A promissory note is a legal paper that clearly states when and how the debt will be paid back. An IOU doesn't usually include these details. It just says that a debt exists.

An IOU typically mentions who owes the money (the debtor) and how much they owe. Sometimes, it also names the person who is owed the money (the creditor). To make sure an IOU is real, it might be signed or have special marks. Sometimes, an IOU can even be traded for a specific item or service instead of money. This is like a special coupon or voucher.

What are California Registered Warrants?

In the U.S. state of California, there was a time when the state government issued special IOUs. These were called "Registered Warrants." They were given out when the state didn't have enough cash right away to pay its bills.

Why California Issued IOUs

In July 2009, during a tough financial period called the 2008–12 California budget crisis, California couldn't pay everyone immediately. So, instead of regular paychecks that could be cashed right away, they gave out these Registered Warrants. These warrants promised that the money would be paid later, when the state had funds available.

Who Received These Warrants?

These special IOUs were given to many different people and groups. This included state employees who worked for California, private businesses that did work for the state, local governments, and even taxpayers who were waiting for tax refunds. People who had unclaimed money from the state also received these warrants.

Because there was no exact date for when these warrants would be paid, they were not considered "negotiable instruments." This means you couldn't easily sell or trade them like a regular check or a promissory note. You had to wait for the state to have the money ready.

See also

• In Spanish: Pagaré para niños