Let’s say the opposite happens, and you are on the receiving end of a check that has expired. The company may be willing to reissue the check, even if it’s stale. Uncashed checks to vendors, contractors, employee payroll, and distributions to stockholders are all potential unclaimed property.
We advise all taxpayers to consult a professional tax advisor regarding their own specific needs. The article above was refined via automated technology and then fine-tuned and verified for accuracy by a member of our editorial team. Stop payments are an essential factor as they highlight why bookkeeping is necessary for the success of your business. Our experts have been helping you master your money for over four decades.
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Business checks often include a note that reads, “Void after 90 days.” This encourages the recipient to cash the check right away—even if the 90-day deadline isn’t real. Like personal checks, business checks are usually good for six months, unless the check stale dated checks clearly states it’s valid for up to one year. After a certain period, the business must report and escheat the funds to the state as unclaimed property. Each state has its own requirements, such as a minimum dollar amount or a minimum length of dormancy.
- Such a call may be awkward, but it’s better than imposing an overdraft fee on the person or business that wrote it.
- Stale-dated checks refer to expired checks or checks that banks and credit unions will no longer process.
- Though certified checks typically don’t expire, they are often subject to state unclaimed property laws.
- This is why it is always best to contact the issuer before attempting to cash a stale or outstanding check.
- You should also keep diligent records of the attempts you made to contact the business owner.
But figuring out what to do if a check resurfaces may seem confusing, especially if they resurface months, or even years, later—perhaps well after their expiration date. 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. If the bank is at fault, a person could explore filing a claim in court.
What to do to avoid stale dated checks?
Be considerate — call or text the payer to let them know your intent. Make sure to also double-check that they haven’t switched financial institutions or opened a new account. Different types of checks are valid for different amounts of time. At Bankrate we strive to help you make smarter financial decisions. While we adhere to stricteditorial integrity,this post may contain references to products from our partners. The offers that appear on this site are from companies that compensate us.
