IOU (debt)

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An IOU is usually an informal document acknowledging debt. The term is derived from the opening phrase "I owe unto" and/or the pronunciation of "I owe you". An IOU differs from a promissory note in that an IOU is not a negotiable instrument and does not specify repayment terms such as the time of repayment. IOUs usually specify the debtor, the amount owed, and sometimes the creditor. IOUs may be signed or carry distinguishing marks or designs to ensure authenticity. In some cases, IOUs may be redeemable for a specific product or service rather than a quantity of currency.

California Registered Warrants

Also referred to as "IOUs" by the U.S. state of California, the term "Registered Warrants", which specify a future payment date, is meant to differentiate these IOUs from regular, or “normal” payroll warrants which permit the holder to exchange their warrant for cash immediately. For both types of warrants, redeeming them may be delayed until funds are available. Because of this uncertainty, warrants like IOUs are not negotiable instruments. Registered Warrants were issued in July 2009 due to the inability of the state of California to meet its financial obligations. They are issued as payment to private businesses, local governments, taxpayers receiving income tax refunds, and owners of unclaimed money.^[1]