Mode of Payment

Payments must be applied in the manner stated by a debtor.  If a debtor does not specify how payments are to be applied, the creditor can apply payments to any legal debt that is owed.  State law may require application of payments to the oldest debt. If no time is specified, payment must be in a reasonable time.

A payment by a check is a conditional payment.  The debt is revived if the check bounces.  The payee can sue on the check or on the debt.


Inside Mode of Payment