Cashing a personal check with insufficient funds

Anybody can accidentally cash a bad check, and it won't result in a crime or any punishment, although you will incur a fee to your bank. But if you knowingly cash a bad check, you may be charged with a misdemeanor or a felony, and you could face jail time. Sometimes called a bounced check, but officially an NSF nonsufficient funds check, a bad check will be returned to you by the bank. If you cash a bad check you've received from someone else, you'll owe your bank a fee for returning the check and will have to try to recover the money you're owed from the other party.

If you cash a bad check you have written to yourself, you'll owe your bank an NSF fee, which varies depending on the bank's terms and conditions.

Intentionally cashing a bad check can be classed as a misdemeanor or a felony. A misdemeanor usually carries a sentence of one year or less, while a more serious felony can result in a prison sentence of more than one year. If you knew the check was bad when you wrote it, you could face a criminal charge and also have to pay restitution.

In most states, the crime is treated as a misdemeanor, and in states that distinguish between a felony or misdemeanor, the amount of the check is a deciding factor. If you consistently cash bad checks, your bank might report you to a consumer reporting agency such as ChexSystems, which tracks your deposit account history. This can make opening a new bank account in the future more difficult.

The more serious repercussion, however, is that you may be reported to the authorities for criminal activity. Consistently writing bad checks can be evidence of criminal intent. If your bank tells you that you've cashed a bad check from a third party, contact the issuer of the check and try to resolve the problem and obtain payment. If you cannot reach the issuer or if he doesn't cooperate, inform his bank that you cashed a bad check from one of their customers.

Ask if there are sufficient funds in the issuer's account to cover the amount of the check. If there are not sufficient funds, and you cannot get hold of the issuer, send a formal demand for payment or bad check notice to both the issuer and the bank via certified mail. If this doesn't result in payment of the funds you are owed, you may have legal recourse through the court system. It's not a crime to accidentally cash a bad check, but if you cash a bad check knowing the funds are not available, you may be charged with a misdemeanor or a felony.

Claire is a qualified lawyer and specialized in family law before becoming a full-time writer. Reviewed by: Rebecca K.

Cash Personal Checks

McDowell, J. About the Author.Personal checks are no longer used as often as they were in the past. Before, when someone wanted to make a payment, all they had to do was to take out their checkbook and fill in the sum.

Afterward, the sum would be cashed in and the transaction would be done. Nowadays, Internet banking has fairly much taken over everything - and it's much easier to make a few clicks than to bother with checks. What they are, how they can be used, and where you can cash personal checks, you may find out by reading this article. Personal checks are pretty much like every check out there: a piece of paper that you use in order to make a payment.

You fill it in with payment information about you and the one you want the pay. Once you hand that check over, the bank will use it to send money into your recipient's account. Since personal checks are exactly the way they sound, personal, you cannot link them with a business account. Everything has to come from the sender's personal account. This account will belong to an individual - or individuals if there are more people with rights to that account for example, a married couple.

A check can be used to pay for pretty much everything, just as long as the recipient agrees to accept that check. No matter if you are paying rent, buying groceries, or paying for insurance premium, a check can be an acceptable form to pay for everything. It is, at least, more convenient option compared to fumbling with actual cash. However, if you want to cash personal checks, that is not possible wherever you go. This can either be due to trust issues - or actual funds issues.

For instance, a check that is linked to a business is always thought to have funds. However, if the account is personal, there is the risk that there won't be sufficient funds - causing the check to bounce. This is why you always need to ensure that every personal check that you want to cash in is legit. Otherwise, you might just end up with a large payment - and no funds to actually use.

Is a Check Considered Cash?

Checks are also a fairly good option when it comes to payday loans. Generally speaking, when you are given the loan, you will leave a check with the sum as well. As mentioned, personal checks are much riskier compared to checks that have been issued by the government. There are various places where you can cash such a check - but there are also some rules that you will have to keep in mind.

Here are some speedy cash locations that you can go to when you are paid with a check. This is the most unusual one and indeed, if you decide to go to your gas station, they do not cash personal checks anymore.

However, 7-Eleven lets you cash in the check by using the Transact app that can be found here as part of their financial services. With this app, you take a picture of the check and you send it with your phone.Advertiser Disclosure. We strive to help you make confident law decisions. Finding trusted and reliable legal advice should be easy. This doesn't influence our content. Our opinions are our own. Even though you take all reasonable precautions, a bad check will occasionally slip through your system.

A bad check can bounce if the customer has insufficient funds in their account, or if the account has been deleted or closed. There are several solutions that apply primarily to bad checks by individuals including calling the customer, sending a certified letter, or contacting the bank.

Can a Bank Cash a Check in an Account That Has Insufficient Funds?

Other techniques may be more appropriate when the bounced check comes from another business. Sometimes a customer stops payment on a check, claiming that the goods you sold were defective. If there's a legitimate dispute, the customer's good faith will be a valid defense to a prosecution or a civil lawsuit for multiple damages.

And if it turns out that the goods were in fact defective, the customer will be entitled to a reduction of the amount owed or even, in extreme cases, a cancellation of the debt. But if the customer's allegations are a trumped-up excuse to get something for nothing, you'll be entitled to your full legal remedies in court. Often, however, in dealing with a customer who is unhappy with the merchandise purchased, the best policy is simply to have the customer return the goods and call it a day.

Be careful about accepting and depositing checks that say "Payment in Full" or something similar. If the check writer owes more, you may be barred from collecting the additional amount. Where there's a good faith dispute about how much the check writer owes you, depositing a full-payment check usually means that you accept the check in complete satisfaction of the debt. Crossing out the words "Payment in Full" generally won't help you.

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You'll still be cut off from suing for the balance. However, a number of states have changed this rule to help creditors. In those states, if you cash a full payment check and explicitly reserve your right to sue for the balance, you can go after the check writer in court. If your state has modified the rule, you normally can preserve your right to sue for the balance by writing the words "Under Protest" or "Without Prejudice" with your endorsement.

For example, California allows you to simply cross out the full-payment language, cash the check and sue for the balance, but the check writer may be able to get around this by following certain procedures specified in the California statute.

By continuing to use FreeAdvice. Helping 20 Million Americans a Year for 20 Years. Find Attorney. Create Legal Documents.It's all too easy to misplace a check. The hard part is figuring out what to do if it resurfaces months, or even years, later—perhaps after its "expiration date.

cashing a personal check with insufficient funds

Legally, banks are only required to honor checks for six months. Practically all checking accounts have zero interest, meaning most people only keep just enough in the account to pay the bills. As a result, when the forgotten check resurfaces without warning, there may not be enough funds in the account to cover it.

This is why it is always best to contact the issuer before attempting to cash a stale check. Making the call may be awkward, but accidentally slapping your grandma with a hefty overdraft fee is worse. Do personal checks expire more quickly than company-printed checks? Some checks come printed with text stating that a check becomes void after 90 days.

This can be safely disregarded as a ploy to nudge people not to hold a check for too long; the six-month rule applies regardless of what is printed on the check.

Checks issued by the U. Treasury are good for one year. Make sure to cash your federal tax refund check no later than a year to the date it was issued. You can request a new check from state and federal agencies.

State and local governments may have their own expiration dates. A money order issuer may charge fees on the order if enough time passes. Check with your issuer for guidelines. Even if banks are only legally required to honor checks in a six-month period, it is usually a good idea to avoid any potential problems by depositing checks when you receive them. And if you fear that a check you have written has been lost or stolen, you should move promptly to cancel it with your bank.

Is This Allowed? Bureau of the Fiscal Service. United States Postal Service. American Express. Checking Accounts.To verify a check, you need to contact the bank that the money is coming from.

Instead, do your own research to find a legitimate phone number for the bank. Some banks make check verification difficult or impossible.

They may require you to visit a branch in person. Or, they may only verify the account exists, not whether it has any funds, in order to protect their customers' privacy. So, what could go wrong?

If you take it to your bank, and it happens to be a different bank, your bank might give you cash immediately. However, the funds have not yet been collected from the other bank.

If you go to the bank that the funds are drawn on, the money comes out of that account immediately.

cashing a personal check with insufficient funds

What happens if you deposit or cash the check at your bank? If your business accepts checks from customers regularly, contacting banks for every check is not practical. Automated check verification services can help you figure out if you're likely to get paid, but they don't necessarily verify recent account balances. Some services even guarantee payment if they fail to alert you to a bad check.

Unfortunately, there is no simple, free tool for consumers to verify checks online. You need to contact the particular bank that the funds are drawn on or the check issuerand the bank needs to be willing to accommodate your request. In addition to asking banks for information, some basic detective work can help you determine if a check is likely to be a fake. Consumer Financial Protection Bureau. Better Business Bureau.

My Adventure Working as a Check Scammer

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Federal Trade Commission. Cross Check. Banking Checking Accounts. Full Bio Follow Twitter. He covers banking and loans and has nearly two decades of experience writing about personal finance.

Read The Balance's editorial policies. Article Table of Contents Skip to section Expand. How to Verify Funds.

cashing a personal check with insufficient funds

What Do You Know? How to Prevent Problems.

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Check Verification Services. Red Flags. Article Sources. Continue Reading.Direct deposit, PayPal and Venmo become more popular by the day, but paper checks are still a thing. Until that day arrives, you may still receive checks that need to be cashed.

If you start a side hustle this year — local or online — you may have a client who pays you by paper check. The best place to cash a check is your personal bank or credit union. Free check cashing may be one of your account benefits. By visiting your local branch, you could have instant access to your cash. That said, depending on your local bank options, you might be better off joining a credit union.

Credit unions usually charge fewer fees than banks. A credit union might also have a lower minimum balance requirement to avoid monthly checking account fees. Pick a local credit union or bank that offers free checking and is convenient to access. It can be the cheapest and quickest option, compared to some of the other options on this list.

Go to your local branch of that bank to cash the check. The teller can then check the account balance to make sure there are sufficient funds to cover the check. As with any of these check cashing locations, you will need to bring your ID to verify your identity.

Each bank has different cashing policies for non-customers. The best way to find out is to call the bank or visit their online website. Sometimes, non-customer banks fees can be more expensive than some of the other options mentioned here.

A few banks only offer non-customers prepaid debit cards for cashed checks. This practice is relatively uncommon. These prepaid cards can come with monthly maintenance fees and expiration dates.

cashing a personal check with insufficient funds

If you receive a prepaid debit card, read the terms and conditions. And if you buy your groceries at Walmart, your cashed check can double as your weekly grocery money. You can expect to pay the following fees for the Walmart Check Cashing services:.

Walmart cashes your check for cash or a Walmart MoneyCard. They waive the reload fee for the MoneyCard for select payroll companies and government checks. Grocery stores are hit-and-miss with check cashing services. You need to ask their customer service desk to find out.First Quarter Finance. Even in cases where you receive money, you can end up either owing the amount of the check back to the cashing institution or having it debited from one of your own accounts.

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At the least, you will owe fees. Below, we explain who is at fault for cashing bad checks, the fees you may face, and the other consequences associated with bounced checks. Both the person cashing the check and the person who wrote the check bear some degree of responsibility when a bad check bounces. Even if you did not know the check was fraudulent, the bank may hold you responsible for the full check amount after you cash or deposit it. Bounced checks can also be reported to agencies like ChexSystems or Telecheck, which report to banks and other financial institutions, representatives for various banks including Fifth Third Bank and PNC told us.

People who write several bad checks may have trouble opening a new bank account or having their checks accepted at stores. If you cash a bad check, you can be charged a fee by the bank where you cash the check.

If you wrote a check that bounced, you may also incur a non-sufficient funds NSF fee. Check cashing locations and payday lenders may charge additional fees. If writing or cashing a bad check leads to court action, you may also end up liable for legal fees. The most basic consequence for cashing a bad check is that you will not get the money the check promised you. Check cashing locations can also send the amount you owe to collection agents if you cash a personal check with insufficient funds.

Additionally, bad checks can show up on a credit report, but typically only do so if a collection agency gets involved or legal action is taken, according to the Consumer Financial Protection Bureau.

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