How to write an IOU form | Let’s learn about legal effects and downloading the IOU form. When transacting money with someone, it is advisable to safely fill out an IOU.
In this article, what is an IOU, its legal effect, how to use it, and the form are also provided for download, so please read until the end.
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What is an IOU?
IOU is an abbreviation for IOU and is mainly used in financial transactions. In financial transactions, an IOU refers to a money loan agreement containing the terms of lending/borrowing money.
Of course, it would be nice if a clean financial transaction can be concluded, but there is a possibility that a dispute may arise in the future, and it is important to prepare an IOU when making a financial transaction to prepare for this.
The IOU is written, signed and sealed by the creditor (the person who lends the money) and the debtor (the person who borrows the money), and each keeps a copy.
Legal effect of IOU
An IOU is a disposition document, and the disposition document contains the rights and obligations of the parties (who knows what and to whom).
If a dispute arises, the court ruling will be based on the disposition document rather than the judge’s discretion.
Therefore, the IOU must be written properly and in accordance with the format, and it becomes strong evidence with legal effect.
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How to write an IOU
The most important right and obligation in an IOU is the function of receiving the money lent. Therefore, in order for the IOU to be effective, it must include the “Repayment Special Agreement (Contents of receiving money back)”.
If there is no information about getting the money back, the court will likely treat it as a gift, so please be careful.
Here’s how to write an IOU:
Personal information of creditor and debtor
debt amount
Information on interest
Repayment date and method of repayment
Penalty agreement in case of non-repayment
When the benefit of the deadline is lost
IOU form
This is an IOU form created based on the instructions.
borrowing certificate
Borrowing date: Year OOOO, Month OO, Day OO
Borrowed amount: Gold handwritten note (￦ handwritten note)
Purpose of borrowing: Living funds
1. The debtor confirms that the above amount has been borrowed from the creditor on OOOO day OOOO month OO date and will be carried out as follows.
principal repayment machine
Interest rate: OO%
Interest payment date: OO day of every month
2. Debt repayment method
The principal and interest must be brought to the creditor’s address on the designated date. Reimburse by payment or transfer to the deposit account below.
OO bank account number: () account holder
3. If repayment of principal and interest is delayed, the debtor must pay an additional delay loss based on an interest rate of 0% per day.
4. In the following cases, the benefit of the period is naturally lost without notice and the entire remaining debt is paid immediately.
When payment of interest is delayed more than ( ) times
When the debtor and joint guarantor receive provisional seizure or compulsory execution from another person’s creditor or apply for bankruptcy reconciliation
When other contractual provisions are violated
5. The costs necessary to secure or collect the above claims shall be borne by the debtor.
6. Any lawsuit regarding the above claims shall be filed at the creditor’s address.
OO month OO day 2000
creditor
Name: (Seal)
address :
Social Security Number :
contact:
debtor
Name: (Seal)
address :
Social Security Number :
contact :
parent child loan certificate
In principle, borrowing between parents and children is presumed to be a gift by the National Tax Service, and if an issue is raised by the National Tax Service, the documents that can logically prove it are the loan slip and account transfer details.
When the National Tax Service raises an issue, the following two items are important to prove that this is not a gift.
You must be able to fill out the IOU and prove the date of creation.
Account transfer details according to the interest rate indicated on the IOU.
Sometimes, it is said that if you only have account transfer details, you do not need to fill out an IOU, but this varies depending on the case.
There are various precedents for this, and if you want to check various precedents, you can check them on the Prime Minister’s Tax Tribunal website.
Go to the Prime Minister’s Tax Tribunal website
The Prime Minister’s Tax Tribunal is a place where, in cases where taxes (national tax, customs, and local taxes) have been unfairly collected, you can check the progress of the appeal, from the filing of the appeal to the submission of evidence.
As a result of looking at several cases, parent and child IOUs must be filled out, and notarization or seal certificates must be processed to confirm the date of writing.
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IOU notarization and seal certificate
The National Tax Service determines that if the IOU is not confirmed, it cannot be trusted, so you must take steps to prove the creation date.
The ways to prove the date of creation are as follows.
Get the loan certificate notarized (620,000 won)
Certification of contents (KRW 1,300)
Seal impression certificate (600 won)
Send email
Among the four methods above, let’s look at how to attach the seal certificate required by the National Tax Service.
How to attach a seal certificate to an IOU
A seal certificate is a public document that reveals the person’s intentions at a specific point in time, and is mainly used as a means of authenticating one’s identity and concluding contracts.
Recently, a certificate of personal signature has been released that has the same effect as a seal certificate, and you can use either document.
When issuing a seal certificate to confirm the IOU creation date, you must enter “For confirmation of IOU creation date” in the purpose field.
Borrowing certificate, seal certificate, seal
If you stamp the seal certificate and IOU issued in this way with the stamp used on the seal certificate, it will become a IOU that the National Tax Service can trust.
frequently asked questions
Q: When should I fill out an IOU?
A: It is recommended that you fill out the IOU before any financial transactions are made, or on the date of the account transfer. Additionally, IOUs between parents and children must be processed by one of the following methods: notarization, content certification, or seal certificate to confirm the date of creation.
Q: When filling out an IOU between parents and children, when should the repayment deadline be?
A: The repayment period is not important, such as 5 to 10 years, but what is important is whether interest and principal repayment (bank transfer) has been made consistently according to the information written on the IOU.