What Is A Stale Dated Check & Its Legal Implications

Though you want to avoid letting a check go out of date, there are some important considerations for a check that has become outdated. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. The Huntington National Bank is an Equal Housing Lender and Member FDIC. Instead, the money likely belongs to the state, and you’ll have to go through the unclaimed property and escheatment process. You should also keep diligent records of your attempts to contact the business owner.

Depending on various factors, the expiration time for a cashier’s check can range from 60 days to never. Sometimes, the issuing bank may mention an expiration date on the check. The only exception is a certified check, which must be honored even after 180 days. If these options don’t work, you can check with the state where the issuing company is located. Remember that escheatment laws require companies to turn over unclaimed funds.

Addressing Expired or Stale Checks

When we talk about dividends, we’re usually referring to the payments a company makes to its… Stale dated checks can also cause discrepancies in financial reports, making it challenging to make informed business decisions. There are a few ways to determine if a check is stale, whether you got it or wrote it.

• The easiest and most effective way is through a check-stop payment order.
• If a state-issued check remains uncashed beyond its validity period, the funds are typically transferred to the state’s unclaimed property division under escheatment laws.
• This may include the check number, issue date, and amount, which can often be found on the original payment notice or the issuing agency’s online portal.

Waiting too long could also result in the payer stopping payment on the check. Other types of checks, like certified checks or government-issued tax-refund checks, may have a longer expiration or none at all. U.S. Treasury checks are paper checks issued by federal government agencies. Some of the most common reasons for receiving a Treasury check include tax refunds, stimulus payments, or social security benefits.

• The primary implication of a stale-dated check is that the financial institution has the discretion to refuse payment.
• If a government check is lost or stolen, you will have to contact the issuing government agency.
• A stale-dated check is a type of check that has not been cashed or deposited by the recipient within a certain period of time, usually six months or more.
• Personal checks are typically good for 6 months (180 days), but business checks, government checks, U.S.

Plus, the person who wrote the bounced check might be charged a nonsufficient funds fee. Banks are still allowed to process a stale check as long as the institution deems the funds are good. However, it’s also possible that your bank might reject the check, and you’ll have to ask for a replacement. On the other hand, your bank might stale dated checks accept the check, but the issuing bank might still reject it.

What to do to avoid stale dated checks?

If you’re unable to redeem or reissue the stale-dated check, you can return it to the issuer. This is often the best course of action if the check is too old to be redeemed or if the issuer refuses to reissue the check. Be sure to inform the issuer of your intentions to return the check, and provide them with your contact information so they can issue a new check or direct deposit. Electronic payment methods can also help avoid stale-dated checks by providing a faster and more convenient payment option. The validity of checks received from state governments varies by state, with a 6-month limit in some states, but this can differ depending on the state’s legislature. Payroll checks used for monthly pay stubs or fees received from clients are also subject to this 6-month rule.

How Long Are State Checks Good For Before They Expire?

As the rightful owner of these funds, the state should hold them in case you claim them. Money orders generally don’t expire, but some issuers may charge a fee if the payee doesn’t cash it within a certain time frame. If you have a problem with a stale or expired check, it’s best to consult with a financial lawyer who can advise you on the best course of action. LegalMatch.com can connect you to a lawyer who can explain the legal remedies available to you and what your best option might be.

The exact due diligence requirements vary by state, but a formal letter to the check recipient is usually a good idea. Almost every state requires a business to perform due diligence by contacting the owner of the unclaimed property. Understand the nuances of expiration for different check types and what actions to take with older checks. Expiration dates and other issues regarding check use are governed by the UCC—that’s a set of laws that regulate commercial transactions in the U.S. If you already see the Delete, Edit, Cancel, or Save options, simply click Edit to reopen the check transaction. Thank you for returning to the thread and following the suggestions provided by my colleague.

Unclaimed property laws require businesses to report and remit unclaimed property, including stale-dated checks, to the state. It is important to keep accurate records of stale-dated checks and to regularly review and report them to the state. If you are sending a check through the mail, use certified mail to ensure it is delivered and received. This can help prevent the check from being lost in the mail or delayed in processing. It also provides proof of delivery, which can be useful if there are any issues with the check being cashed.