I got a notice from my bank today that a check had been paid and that I had been charged a no-bounce fee (insufficient funds). I was caught off-guard by this, since I’ve moved out of state and haven’t written any checks on that acct. in a while. I had actually run it down almost to zero and was going to mail paperwork to close it this week.
It turns out the check is one I had written to a gardener 5 months ago, in February, and he only cashed it now. It got me to thinking–what would have happened if I had closed my acct. more quickly (last month, say)? What happens to him, me, the bank in a situation where someone tries to cash a check after an account is closed?
If the account had been closed, the check would have bounced, simple as that. Wheather or not the bank would charge YOU any fees, I don’t know, I kinda doubt it.
I don’t know if it is a law that varies by state, but I think AudreyK is right; checks are not supposed to be honored 90 days after the day it has been written. It’s been a while since I was in the banking business, so I could be wrong.
Checks don’t go automatically bad after 90 or 180 days. In operations terms, they go stale.
As John Burnett points out in Canadjun’s link, (I hang out at BOL as well. Good site if you’re in the banking biz.) it’s a myth that banks can’t pay a stale check. Urban legend. Fantasy, even. Checks do not have an automated “Void after xx days” function. There is a very narrow timeframe in which a bank can say “This is a really old check and we’re not convinced it’s still valid, so we’re returning it.” Otherwise, if it’s been deposited in good faith and nobody objects to it, it will go through and hit the maker’s account.
If there’s money in the account, it’s paid. The maker has only 24 hours to notice and object to it. If paying that check will impair the payment of other checks or debits, oh well. If the account does not have sufficient funds, then the stale check will bounce as NSF.
If the OP had closed the account before the gardener deposited the check, the check would have bounced as “account closed” and the gardener would then have a valid claim against the OP as they deposited the check in good faith.
I always wonder when I see stories like this. Am I the only person who keeps note of outstanding checks after balancing each month? Or am I the only one who balances her checkbook? I get mighty annoyed when checks remain uncashed for several months, and if I wanted to close an account that had an outstanding check, I’d be calling the recipient and having words. I sure wouldn’t take a chance on the check going void after X number of days.
No, you are not the only one. I always balance and keep track of checks that have not cleared. (Although I sometimes wonder if we are in the minority. My wife does not balance her account, which is one reason we have separate accounts.)
There have been two occasions where I have contacted people regarding long-overdue checks and written them new ones because they had been lost. (I try not to cheat people out of money.) Luckily neither person found the “lost” one later and cashed it.
I had thought checks later than 6 months couldn’t be cashed. Thanks to those Dopers for educating me.
I’m in Canada and this was many years ago, but I once received a government cheque that was “stale-dated”. It’s so long ago I don’t remember exactly why I deserved that cheque (something to do with a summer job with the government that I had, but I wasn’t expecting the cheque). It must have got lost at their end and then found again, because I got it in the mail one day accompanied by an official letter saying that the cheque should be considered valid even though it was so old. I guess that was simpler from their point of view than reissuing the cheque.
I once wrote a check for a $5 co-pay to a physical therapist. I was going every week so, I didn’t notice that one check wasn’t cashed.
I moved and closed my bank account. Two years later, the bank tracked me down, wanting to charge me fees upon fees because the two year old check had finally been cashed.
It had apparently, been put in a drawer, and fell behind the desk. The bank didn’t waive the fees, even though the check was old. The PT office ended up paying them.