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Thursday, August 3, 2017

How to handle stale cheques

Banking and commercial practices consider a cheque stale when it was written long ago and the person to whom it was written never cashed it, according to www.legalmatch.com.

Will a bank honour a stale cheque I wrote :
Unless you write on the cheque that it will not be valid after a certain number of days , banks may honourthecheque. Generally , banks are not required to honourcheques that were written more than six months prior. In some states, a bank will consult with the person who wrote the cheque if it is presented with a cheque older than six months. Certified cheques, which are guaranteed by a financial institution, cannot go stale and will be honoured at any time .

What can I do if my bank honoured a stale check without my permission : Your bank is not responsible for any damage to you if they honour a stale cheque in good faith. If your bank did not act in good faith, an attorney may determine what remedies are available to you .

How do I know if my bank acted in good faith : While there is no definitive definition of good faith, there is some consensus as to what it means .
Essentially, a bank acted in good faith if they did not notice the date of the cheque . However, if a bank employee notices the date of the cheque before cashing it, and does not consult you, courts will often determine the bank acted in bad faith.

Is there anything I can do to prevent a stale cheque from being honoured : Most likely a bank employee will not notice the date the cheque was written .
Besides writing a “valid until ” notice on the cheque, you can contact your bank and request a stop payment if the cheque has not been cashed yet.

What can I do if a bank will not cash a stale cheque: While a bank may no longer accept a cheque dated more than six months ago , the person who wrote the cheque is still liable to you for the debt or obligation that they wrote the chequefor .

Do I need a lawyer : An attorney specialising in banking laws or regulations may advise you of your remedies if you believe a bank honoured a stale cheque in bad faith. If you are unable to cash a stale cheque, a lawyer can help you recover the debt or obligation from the person who owes you the money .

What is a stop payment ?
When you give your bank reasonable notice not to honour a cheque you wrote, you have requested a stop payment .

How do I request a stop payment: Most laws allow bank customers to make oral stop payment requests . However , the law may have a statute that requires a stop payment request be made in writing . If there is a writing requirement, and you made the request orally, then the law typically requires that a written request be made within 14 days of the oral request to prevent the stop payment request from expiring . Written requests are generally valid for six months.

May I stop payment on a teller cheque : Generally , a cheque drafted by a teller is drawn from an account held by the bank . Since the cheque is drawn from an account belonging to the bank , as opposed to your personal account , banks are not required to place a stop payment.

What if my bank did not honour my stop payment: If you give your bank reasonable notice to stop payment of a cheque you wrote, your bank must honour your instructions. If , despite giving reasonable notice , your bank pays a cheque , the bank is responsible for any damages you may have suffered.

Can I sue a person who placed a stop payment on a cheque I tried to cash : Usually , if a cheque you cashed was returned because a stop payment was placed on it, you may take legal action . For your lawsuit to be successful , you must show that the person who issued the stop payment acted in bad faith . Usually you can sue for the amount of the cheque plus damages up to three times the amount of the cheque.

What if I am being sued for placing a stop payment: If you are being sued for having ordered a stop payment , you will need to show that when you stopped payment, you did so in good faith . An example of a good faith stop payment would be that you were not satisfied with a service you received.

Do I need a lawyer: Stop payment regulations vary . Some banks have relaxed policies while other banks have rules that closely follow the law .

Whether you wrote a cheque and requested a stop payment , or you cashed a cheque that was returned , an experienced attorney specialising in banking laws and regulations can advise you of the applicable laws where you live and advise you of your rights and remedies .

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