A stale check is a check that remains undeposited or uncashed long after the date on which it was issued. It may be too old to be processed by a bank, credit union, or other financial institution. A stale check is also referred to as a “stale-dated check” or an “expired check.” The length of time that a check is considered to be valid may vary from state to state. Also, the issuers of checks sometimes note a time limit on their checks’ validity on the face of the check.
If a person has been given a personal or business check, it is important to understand that the check has a limited period during which it is valid. Most personal checks have a maximum time frame in which they can be presented to a bank before they become stale or invalid. The standard period is usually 180 days, i.e., 6 months, from the date on which the check is issued.
In basic terms, a check becomes stale if it has been in one’s possession for 180 days or more and has not been cashed or deposited. After six months from the day a check is issued, checks may not be deposited into one’s checking account. This is because they have become stale. A bank might refuse to accept this check.
A check is usually payable at the time it is negotiated or presented to a bank for deposit or cash. However, a person may no longer be able to deposit or cash a check after it has become stale.
Assume a person receives a check that is more than 180 days old. Depending on the circumstances, a bank may refuse to honor the check and will not allow the person to deposit or cash the check.
Some business checks will have “Valid For 90 Days” noted on the check. The issuing bank’s stale check policy may not allow them to honor a business check if it is presented after the 90-day period.
That is why a person should carefully look at any check they have been given and make sure that it is not already stale. A person should know how long they have to cash or deposit the check before it becomes too old. They should act within that time period – to deposit or cash the check.
Do Banks Honor Stale Checks?
Generally speaking, banks or other financial institutions have the right to refuse or reject a stale check. Checks can become stale or outdated after a certain amount of time has passed.
States that follow the Uniform Commercial Code (UCC) for bank deposits determine the timeframe for how long a check is valid at 180 days or 6 months from the check date.
However, it is up to the bank to decide if it will process a stale check. If a person wishes to cash a stale check at the issuing bank, then they would need to get approval from that bank before presenting the stale check.
In either case, banks are under no obligation to accept a check once it is deemed stale. Some banks may do it, but they may charge a fee for depositing or cashing a stale check that is older than 6 months.
Whether a bank that issues the check would allow a person to cash a stale check usually depends on the following factors:
- The account owner’s or payor’s approval;
- Whether the account is still open and in good standing;
- The name of the payor on the check matches the name of the account owner;
- There are sufficient funds to cover the check;
- The name of the payee matches the identification of the person cashing the check.
On the other hand, if a bank allows someone to deposit a stale check into their account, it will usually depend on the following factors:
- Whether the issuing bank is still in business;
- Whether the payor’s account is still open and in good standing;
- Whether there is a stop payment order in effect;
- The amount of the funds has been verified as available;
- The depositor’s average daily account balance;
- Whether there are enough funds in the depositor’s account to cover the check if it is rejected;
- Placing the funds on hold until the check clears.
If the stale check is returned for any reason, then a person’s bank may charge a fee for returning the check to the person. They may then reverse the deposit if the funds were not placed on hold.
What Can I Do if My Bank Honored a Stale Check Without My Permission?
Verify the bank’s policies and procedures to see if they provide a remedy or a reimbursement for lost funds or fees that a person may have incurred because their bank accepted a stale check. Typically, if a bank honors a person’s check in good faith, absent a stop payment order, they may not be at fault for allowing a check the person issued to be processed and allowing the funds to be debited from their account.
If the bank is at fault, a person could explore filing a claim in court. However, a bank is typically only liable for honoring a check if there is an issue other than the date of the check, such as a forged signature or the check was counterfeit or fraudulent.
In some cases, if a person’s bank was negligent – e.g., their bank failed to perform due diligence in verifying the check, then they could request compensation for any losses or damages.
How Do I Know if My Bank Acted in “Good Faith?”
A person would have to get evidence regarding the actions their bank took when it honored a stale check. This might require a person to file a lawsuit against the bank so that it can gain access to the bank’s records regarding the case.
Is There Anything I Can Do to Prevent a Stale Check From Being Honored?
There are a few things a person can do to prevent a stale check from being honored by a bank. The easiest and most effective way is through a check-stop payment order.
Specifically, any person who is authorized to draw on an account can ask their bank to flag the account to stop the payment of the outstanding check. A stop-payment order is designed to stop the check from being processed and prevent the withdrawal of funds from the account to pay the check.
A stop-payment order is effective from six months to one year, depending on the bank, but most banks will allow you to renew or extend a stop-payment order if the check is still outstanding. When a person contacts their bank to order a stop payment, it is important for them to verify that:
- The check has not been deposited;
- The check has not cleared your account;
- The person has the correct check number, the correct amount of the check, and the correct name of the payee.
A bank will, in good faith, do all it can to stop payment on a check, but a bank will not guarantee that the check will not be processed. If a bank is unable to stop payment on a check, the funds may be debited, and the person who made out the check may be responsible for any fees, including the fee the bank charges for stop payments.
Another thing a person can do to prevent a stale check from clearing is to freeze their account. Typically, accounts are frozen if checks have been stolen or there is other possible fraudulent activity, but a person can always ask to have their account frozen.
Freezing an account will prevent all outstanding checks from clearing. It will also prevent the person from making any deposits, as all transactions will be effectively stopped or “frozen” until the account is unfrozen. Frozen bank accounts are typically not going to be unfrozen. A person may just wish to start a new account.
What Can I Do if a Bank Will Not Cash a Stale Check?
A person may find that a bank will not accept a check made out to them or their business because it is now considered “stale.” In that case, there are a few things a person can do to recover the amount they should be paid.
One solution is to try to cash the check at the payor’s bank. If possible, try to go to the branch where the payor’s account is located, as they may have a banking relationship with the person or business that wrote the check.
Another solution is to contact the person or business that wrote the check and ask them if they would issue another check to replace the stale one.
A last resort would be to seek a legal remedy through the court system. The amount of reimbursement you are seeking determines the court in which a person should file their claim.
Are Punitive Damages Available From a Bank When They Wrongfully Honor a Stale Check?
Punitive damages are awarded mainly in cases that involve negligence or intentional torts. They are awarded only rarely because few cases are seen as warranting an award of punitive damages. They would be awarded to a victim of negligence or an intentional tort in cases in which the responsible party did something truly egregious or extraordinarily reckless.
To make a case for punitive damages in a situation in which a bank wrongfully honored a stale check might be challenging. Again, only if the bank committed some type of outrageous wrong could a claim for punitive damages succeed.
Do I Need the Help of a Lawyer for My Stale Check Issue?
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.
A lawyer can help you understand your rights and what actions you can take to protect yourself. If you have any questions or concerns, it’s always best to speak with a lawyer before taking any action.