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The date you choose to use is not part of a legally binding agreement between you and the payee. In most cases, the recipient can deposit the check at any time, and the bank is free to pay funds out of your account before the date shown on your check. Realistically, the recipient of a post dated check may never notice that the check has been post dated, and so will record and deposit it at once.
Is a postdated check considered to be currency?
In such cases, the defendant’s admission, if believed, would provide the required proof of the defendant’s criminal intent to defraud the victim with a postdated check. The Uniform Commercial Code (UCC) enables lenders to loan money, secured by a borrower’s personal property. Adopted by nearly every state, the UCC is a standard set of business laws that was first published in 1952 to regulate financial contracts. Article 3, Section 113 of the UCC outlines the rules for postdated checks. This section allows financial instruments to be either post or backdated and indicates that the payment cannot be made until the specified date on the instrument.
- But what if the check recipient doesn’t listen to my instruction and deposits the check before the written date?
- Some states might have a specific name for the crime such as theft by deception, passing bad checks, or negotiating a worthless instrument (checks are a type of “negotiable instrument”).
- However, your property owner gives you up to the first five days of the month to pay.
- Since the postdated check is not considered to be money until the date of the check, the accounts receivable should not be reduced and cash should not be increased until September 5.
- Someone intends to defraud if they never intended to actually pay the other party, but wrote the check anyway.
In many states, the severity of the crime is determined by the dollar amount of the worthless check or checks. Class 2 misdemeanors carry up to 12 months in jail and a $1,000 fine, while Class 1 misdemeanors carry a maximum of 18 months in jail and a $5,000 fine. A Class 6 felony carries also carries a minimum of a year and a maximum of 18 months in prison and a fine. Luckily for them, Foster waits to cash postdated checks, but he isn’t legally obligated.
What is a Postdated Check?
A postdated check is one that is written with a future date indicated on it. This is usually done to account for an anticipated delay in deposit. For example, you may decide you would like to postdate a check if you are sending in a bill payment earlier than the due date. It is also common to postdate a check if there are insufficient funds in the checking account at the time the check is written.
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When someone writes a check intending not to cover it, they can be guilty of a theft crime. Some states might have a specific name for the crime such as theft by deception, passing bad checks, or negotiating a worthless instrument (checks are a type of “negotiable https://accountingcoaching.online/ instrument”). Whether the crime is a misdemeanor or a felony often depends on how much money was involved. If the postdated check was received as payment on accounts receivable, the accounts receivable balance is not reduced until the date of the check.
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That means the bank must wait to cash the payment until the date stated on the paper or until six months is up, whichever comes first. But if the consumer gives oral notice to the bank, the institution must only wait 14 days before processing the note – even if that happens to be before the date on the check. Additionally, the only time a bank can be held liable for processing a postdated https://personal-accounting.org/ check before the indicated date is if that notice is still valid. In which case, the CFPB says the institution may may be on the hook to cover damages such as the cost of overdrafts and other fees. Consumer advocates who spoke with Consumerist say that while there are several reasons someone might think it’s a good idea to use a postdated check, it’s not generally recommended.
Keep in mind that waiting to cash a postdated check still won’t guarantee that they’ll have the money to cover it. Say your roommate writes you a postdated check for their half of the rent because they’re expecting to get paid by a certain date. Banks can establish different policies for https://simple-accounting.org/ dealing with postdated checks. For instance, your bank might honor the date that’s written on the check and hold any postdated checks for deposit until that date arrives. Or you may be able to request that a postdated check you’ve written be held over until the date noted on the check.
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Writing a postdated check could give you time to make a deposit in order to cover the amount, but it could lead to headaches if it’s cashed early. The laws governing checks vary among states, although many jurisdictions have similar provisions. If you wrote a postdated check that was improperly cashed or deposited before the date on the check, or you need help filing a suit to collect on a bad check, consider talking to an attorney. In most cases, when you receive a postdated check, 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.
What if the Bank Cashes a Post-Dated Check Early?
Another term used for checking accounts is Demand Deposit Account or DDA, meaning that when a check is presented to a bank it is a demand to be deposited into the account of the payee. These types of post dated checks can serve as electronic proof of a business transaction in the event that accounting records become lost or damaged. Typically someone writes a postdated check because the funds are not currently available in the account from which the check is drawn, but will be available presumably by or on the date noted on the check.
However, I do expect to have those funds by the date written on the check. So, I post-date the check so that the check recipient knows not to deposit that check until that date. Financial instruments such as money orders and bank drafts cannot be postdated because you must pay for them up front. The bank can cash your post-dated check at any time, even before its authorized date—unless you specifically instruct it otherwise. If you want a basic checking account with no monthly maintenance fee, or an interest-earning checking account, we’ve got the options that are right for you. However, postdating a check can lead to inconveniences and ill feelings for the payee, such as when a tenant sends a rent check and may or may not have the funds ready to be withdrawn.