One of the myths that somehow refuses to go away is the myth that post-dated checks are “illegal. There is nothing illegal, inappropriate, unlawful, unethical, unprofessional, or unconscionable about a creditor asking a customer to issue a post dated check, nor is there any reason a customer cannot issue one or a series of post dated checks to clear a past due balance. There are several advantages to taking postdated checks in settlement of an account balance including these:. The fact that you are holding a check that will be presented to the bank for payment on a specific date places a burden on the debtor to have funds on deposit when the check is presented. In the event that the check is dishonored and the customer is sued, the existence of the check makes it harder for the customer to argue that the debt was never owed. Even if a post dated check is not honored when it is first presented, there is always the possibility that the check will clear at its second presentment, or that the creditor can tender the check to the debtor’s bank on a collection basis.

Does Postdating A Check Prevent Anyone From Depositing It Early?

By using our site, you acknowledge that you have read and understand our Cookie Policy , Privacy Policy , and our Terms of Service. It only takes a minute to sign up. As noted in another question , banks have different policies regarding post-dated checks before the post-date, although it seems most will accept the check as long as the check issuer hasn’t contacted the bank.

If a bank has a policy of NOT accepting post-dated checks before the post-date, and the recipient tries to cash the check at a teller, the teller can easily say no. But, what if the check is cashed via the ATM?

Because they might not always have enough money in their accounts on the day they write those checks, some folks will postdate their checks.

Code of Laws makes it unlawful to write or utter a fraudulent check. Value can be money, services, credit, payment for rent, or certain other reoccurring liabilities or taxes. Credit means the securing of further advances for money, goods or services, when a check is given in whole or part payment of a then existing account. The following checks cannot be criminally prosecuted: Those given in full or partial payment of a preexisting debt unless you can prove an intent to defraud.

Those where the payee knows or has reason to know that the check is not good. This includes post-dated checks and situations where the payee is instructed to hold the check to a later date. Those checks not deposited into an account of the payee within 10 days after their receipt. Two party checks unless an intent to defraud can be proven. Checks more than days old.

Banking Laws Regarding Undated Personal Checks

As a small business owner, you may use business software to expedite the payment process. But every now and then, you may need to write a check to a vendor or receive one as a form of payment. A stale check can create an accounting hassle. A stale check is one presented to a bank after a specified time, typically six months.

Law on Postdated Checks. The Uniform Commercial Code states that a bank may honor a postdated check provided the check is otherwise safe to cash and the.

Two potential reasons for this include:. These caveats apply when writing a future date on a check:. In most cases, you can deposit or cash a postdated check at any time. Debt collectors may be prohibited from processing a check before the date on the check, but most individuals are free to take postdated checks to the bank immediately. That said, if you agreed to wait, cashing the check prematurely might be considered in violation of an oral agreement and could be illegal in some jurisdictions.

Find out if the check was intentionally postdated, and figure out a solution. Banks in the U. Cashing a postdated check might be a challenge. However, a rejected payment or an unexpected withdrawal from your checking account can cause numerous problems. If you provide instructions to your bank and they pay funds from your account, your bank should be required to cover any overdraft charges that result, and you may have further recourse against your bank for other expenses you face.

If you have the option, it is best to avoid writing postdated checks. Even if your payee is honest, they may make the honest mistake of forgetting and leaving you with bad check fees.

What do you mean by PDC or post-dated check?

I wrote a post-dated check to cover an IOU. You could go after the person you wrote your check to, on the grounds that he broke an agreement to hold off on cashing the check. Post-dated checks are perfectly legal.

Under Wisconsin law, a bank may deposit or cash a postdated check “unless the customer has given notice to the bank of the postdating.

In banking, a post-dated cheque is a cheque written by the drawer payer [1] for a date in the future. Whether a post-dated cheque may be cashed or deposited before the date written on it depends on the country. A Canadian bank, for example, is not supposed to process a post-dated cheque and if it does so by mistake, the cheque writer may ask their bank to correct the error. In the United States and the UK , post-dated cheques are negotiable instruments and can be drawn upon at any time, while in India and Australia post-dated cheques are not payable until the date written on the cheque.

Where a demand for payment of a cheque is made before the date of the cheque arrives, the cheque shall not, by reason of the demand, be taken to have been duly presented for payment. The Commonwealth Bank of Australia ‘s rules and conditions for cheques Section 1. This is known as a post-dated cheque and it cannot be paid until that date arrives. While this is a sound interpretation of Australian Commonwealth law, for insurance reasons the bank protects itself from possible attack with the condition Section 1.

The Australian Tax Office require that cheques made for tax payments ‘must not be post-dated’. In Brazil , the drawer may seek damages in Justice if their cheque is cashed in before its due date, according to the jurisprudential orientation of the Superior Court of Justice , as per Summary No. Under the clearing rules of the Canadian Payments Association , a post-dated cheque cannot be cashed prior to the date written on it. If a Canadian financial institution inadvertently accepts and processes a cheque before the due date, the cheque writer may ask his or her financial institution to return the amount until the day before the cheque should have been cashed.

Post-dated cheques in Indian law are considered under the Negotiable Instruments Act,

Post-Dated Cheques

Different banks have different policies, but the majority of banks discourage the practice of post-dating cheques. Many state in their terms and conditions that post-dated cheques should not be written, while some include a note at the front of chequebooks, saying post-dated cheques should not be written. There are no specific rules on how banks deal with post-dated cheques if they are paid in before the due date.

This is likely to be inconvenient to both you and the person or business you have given the cheque to. If the bank does not spot that the cheque has been post-dated, the cheque would then probably be paid before you intended or returned unpaid if you have insufficient funds in your account. This could potentially incur you charges and cause inconvenience to the recipient.

But when I pay bills and I date the checks the day they are due but mail included, state law specifically protects banks that cash postdated checks. people write a check without having sufficient funds, postdating it and.

Every time someone begins to negotiate a lease for a residential premise, the issue of security deposits and post-dated cheques needs to be dealt with. Consumers are often unaware of their rights and obligations and so have an unequal bargaining position with a potential landlord. Here are some comments on both issues. We hope they help. A deposit is usually demanded by the landlord in order to use all or part of the deposit to cover any damages to the property caused by the tenant or to cover rent should a tenant fail to make a rent payment.

The legal limit for deposit and the type of deposit allowed will vary from province to province. A tenant may also be able to get interest on the security deposit when the tenancy ends or is terminated. Check with your local Landlord and Tenant Board to get up to date information on your rights. However, it is illegal for a landlord in Ontario to demand a security deposit, for potential damages to a rental unit [1].

Due to this, many landlords have tried to use creative ways to come up with charges to get around the rule for security deposits. However, the Ontario Residential Tenancies Act prohibits any other additional charges [2]. Your landlord cannot directly or indirectly require or attempt to require from a tenant any fee or deposit of this nature. In British Columbia, the rules are different. A security deposit can be demanded.

Cheques – What you need to know

A postdated check or draft will display a future date on it. A check user will often write this in to specify that they do not want to withdraw the amount of the check until the date specified. Adopted by nearly all states in the U. The UCC better enables lenders to loan money, secured by a borrower’s personal property.

If your cheque has a future date, present this for deposit on or after that date. Foreign cheques will take longer to clear and are subject to the laws and.

There are both civil and criminal penalties for this unlawful act, although it is much more costly and difficult to prove a criminal case. Always consider your goal: to recover the money or punish the check writer? Civil Penalties by State. Criminal Penalties by State. Payments for COD or preexisting debt: In most cases, NSF checks are not considered under the bad check law if they are used to pay an antecedent debt. Therefore, if a debtor gives a debtor an NSF check to pay a note payment or to pay an invoice that is on account, the act generally does not fall within the bad check law.

However, if the debtor provides a creditor with a NSF check for a COD order, then that act does fall within the bad check laws. Postdated Checks: Section 2 b of the UCC, defines a check as “a draft drawn on a bank and payable on demand. Consequently, it has generally been held by most states that the giving of a post-dated check does not constitute a present fraud nor is it within the scope of the bad check laws. Who is the guilty party? The guilty party of a fraudulent check is usually the person who signed the check, but it could also be the person who fraudulently passed it on, or even a third party who endorsed and passed the check on to another.

Civil Penalties by States The following information may be out of date when you read this. Check with your state statutes for current law. Statutory form of notice must be sent at least two times.

Why you should never issue a post-dated check