You’re writing a check to your landlord, but you don’t have enough money in your account. So you date the check a few days in advance — also called postdating it — hopingyour paycheck will clear by then.
Bad news: The check date won’t delay anything. Here’s what you need to know about postdating and what you can do instead.
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Postdated checks and payees
“It’s kind of a tricky scenario,” says Matt Foster, founder of the rental property search site iRent and a landlord in Ventura, California.
He receives checks from some renters on the 28th or 29th of the month that are dated for the first of the nextmonth. He suspects his tenantsdo this to keep him from cashing their rent checks before they’ve been paid, sotheir rent checks don’t bounce.
Luckily for them, Foster waits to cash postdated checks, but he isn’t legally obligated. And in most cases, neither are banks.
Bank rules on postdated checks
Banks and credit unions generally staterules about postdated checks in their account disclosures. Some of the biggest banks, for example, note specifically that they can honor checksthat aremade out for future dates.
The Uniform Commercial Code, a collection of businesslaws adopted or adapted by many states, gives financial institutions the right to processa correctly written check witha future date. But you can ask your bank to delay cashing a specific check, and, depending on yourstate and the bank, it might comply.
What’s the worst that can happen?
If you writea check and don’t have enough money in your account when it’s cashed — whether or not it’s postdated —your bank can cover the paymentor let the check bounce based on itsoverdraft practices. If the check goes through, you’ll pay an overdraft fee. If itdoesn’t go through, the recipient might charge youlate fees and a bounced-check fee. But usually it doesn’t get much worse.
“From a criminal law perspective, there is nothing inherently illegal about postdating a check,” says Eric Hintz, a criminal defense attorney at Hintz & Welsh in Sacramento, California.
Hintz saysthat only criminal intent, such as intentionally not having enough money for a payment, can be grounds for check fraud.
How do you delay or stop payments?
Consider these three strategies:
– Talk to the recipient.Tell the person receiving your check — your landlord, a merchant, a friend or family member — aboutyour situation. Find out if he or she will accept payment later.
– Schedule an electronic transfer,such as an online bill payment. This is a much more preciseway to makefuture payments, andyou won’trisk sending moneybefore you’re ready.
– Request a stop payment.Your bank provides this service, usually for a steepfee, butyou must give it notice. The amount of notice depends on your bank.
» MORE: How to cancel a check
It’s risky to rely on postdating or processing delays to ensure your check clears. Financial institutions nowsend digital pictures of checks to other financial institutions, so they can be cashed more quickly.
“In short,” says Mathew Dahlberg, a financial advisor at Main Street Investments in Kansas City, Missouri, “if you don’t have the money in your checking account, then don’t write the check!”