One noteworthy topic had to do with post-dated checks and what happens to them when you attempt to deposit or cash the checks before the date written on them. Curious as to what happens when I defy the concept of post-dating, I checked with banks to their rules on the matter. When you post-date a check, you put a future date on the check with the idea that the recipient does not deposit it until that written date. 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. I turned to Wells Fargo and Chase to help me answer that question.
Today I notice that both cheques have been cashed at the same time. I telephoned the bank and they told me that I was breaking the law writing a cheque with the wrong date on it and that It was illegal!! Yes That right.
This article discusses general laws about checks, post-dating, and the parties’ rights. Uniform Commercial Code. Personal checks (and other “negotiable.
Canada has one of the most efficient cheque clearing systems in the world and, while the use of cheques has been declining with the growing popularity of electronic and card payments, financial institutions in Canada still process nearly a billion cheques every year. A cheque is an agreement of payment between two individuals or organizations. So when you write a cheque, you are agreeing to pay another individual or organization money that you owe them and you are instructing your bank to make that payment.
Here is some helpful information about the use of cheques and how they are processed by financial institutions. All cheques must be processed — or cleared and settled — through the payments system. When you deposit a cheque into your account, your bank will send the cheque to the bank of the person who wrote the cheque.
This process can take a few days but, for most cheques, the bank makes the funds available to the customer right away. Banks are required to provide their hold policies in writing when an account is opened. If your financial institution is currently putting a hold on your cheques, ask if there are alternatives to this hold.
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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. But just about anything with the right signature on it is properly payable, including post-dated and overdrawn checks.
No. What is illegal is fraud: obtaining goods or services by promising a payment that you do not intend to pay. A post-dated check would not be.
Contents: Is it illegal to post-date a check? About the author post dated cheque Post dating cheque – illegal. But again, it is illegal to ask for them. In BC yes, it’s common for people to provide post dated cheques, mostly we do 6 months, when you move out, you take your cheques back. Bill me in Turkish Lira, Watch Me around the world. I have seen leases where, after completion of first 12 months there is an option to renew for another 12 months.
If giving post dated cheques is illegal, then apparently there are lots of people breaking the law. On almost every lease agreement I’ve seen, it has mentioned post dated cheques. Bank tellers are humans. Some are more strict than others.
Federal Register of Legislation – Australian Government
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Register and all cheques illegal for deposit under the use of a post dating cheques, because in cheque. It is actually a postdated check is written. After a.
We respect your privacy. All email addresses you provide will be used just for sending this story. Thanks to automated payments and online banking, many of us rarely if ever write checks, but millions of Americans still pull out their checkbooks every day to pay their bills. Consumerist reader M. The only way to possibly prevent a postdated check from being processed early is to let everyone involved know in advance — and in a format that goes beyond just postdating the check.
In some states, if a consumer gives the financial institution reasonably timed written notice about a postdated check before the check is received, then the notice is valid for up to six months. 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.
Post dating cheque – illegal
We would like to ensure that you are still receiving content that you find useful — please confirm that you would like to continue to receive ILO newsletters. In Sampelly Satyanarayana Rao v Indian Renewable Energy Development Agency Limited 1 the Supreme Court held that a dishonoured post-dated cheque for repayment of a loan instalment that was described as ‘security’ in the loan agreement was covered by the criminal liability set out in Section of the Negotiable Instruments Act In accordance with Section , it is a criminal offence for a person to issue a cheque which is subsequently dishonoured from an account maintained by him or her in order to pay any amount of money to another person from that account for the discharge, in whole or in part, of any debt or other liability.
While deciding whether dishonoured cheques issued to discharge existing liability fall under Section of the act, the Supreme Court further explained that the question of whether a post-dated cheque is for “discharge of debt or liability” depends on the nature of the transaction. Section is attracted only if, on the date on which the cheque was issued, liability or debt existed or the amount had become legally recoverable.
A cheque is a written instruction to your bank to pay a specific amount of money It is imperative that cheque account holders do not issue post-dated cheques.
Next Last. Landlord requesting post dated cheques at extension of tenancy agreement I’m on a 12 month fixed post-dated tenancy agreement. Next month comes the end of fixed term and the tenancy agreement will be turned to a month-to-month term. Landlord is requesting 12 cheque dated cheques to cover the next 12 need of rent. Is that fine?
Just wondering if I’ll move out anytime during the next 12 months, if the landlord is required by law need return me the unused cheques. He may be asking just for convenience purposes. Cheque you want to go to his place every month to pay rent? It is tenant’s responsibility to ensure payment of rent on time as outlined in the initial contract.
Security Deposits and Post-Dated cheques: Do I Need to Provide Them?
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But usually it doesn’t get much worse. “From a criminal law perspective, there is nothing inherently illegal about postdating a check,” says Eric.
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.
Supreme Court rules on post-dated cheque given as security for repayment of loan instalment
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.
Postdated Checks & Criminal Law. A person writing a postdated check may violate the law if the check is returned by the bank to the recipient because the maker’s.
Can I Accept a Post Dated Check From a Tenant?
Part I—Preliminary. Short title [ see Note 1] Commencement [ see Note 1] Application of rules in bankruptcy, laws of States and Territories and rules of the common law. Cheques a financial institution draws on itself Certain rights, duties and liabilities under Act may be altered by agreement.
In banking, a post-dated cheque is a cheque written by the drawer (payer) for a date in the future. Whether a post-dated cheque may be cashed or deposited.
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.