Sara Student wished to pay off her $5,000 student loan. If she sends in a check for $3,000 and the creditor cashes the check, the debt will be fully satisfied provided the check is marked "paid in full."

Question

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If Sara sends in a check for $3,000 and the creditor cashes it, she still owes $2,000. Unless the creditor agrees to accept the partial payment as full satisfaction of the debt, marking the check "paid in full" is not enough to release Sara from the remaining balance. The creditor could pursue legal action to collect the remaining $2,000.

Sara Student Wished to Pay Off Her $5,000 Student Loan