When Can You Stop Payment on a Check?

A stop payment is what occurs when an individual gives their bank reasonable notice not to honor a check that they wrote. Simply put, a check is an order made to a third individual, or the bank, to pay a specific sum.

A check can also be described as a three-party instrument, with the parties being:

1. A drawer;
2. A drawee, or payor bank; and
3. A payee.

Some examples of the many different types of checks include:

• Government Checks or Warrants: A government check, or warrant, is an instrument payable on demand that is drawn by the government or on the government. An example of this would be something that is drawn by the Treasurer of the United States. A warrant that is issued by a governmental agency or by a state or local government is also treated as a check, if it is payable on demand;
• Cashier’s Checks: A cashier’s check is a bill of exchange or a draft, which is drawn by a bank on itself. Generally speaking, a cashier’s check is purchased by the customer of an issuing bank and is used for a payment when a check that is signed by an authorized representative of a bank is needed. The purchaser is not a party to the cashier’s check, unless they are named as a payee or they add their own signature or endorsement to the cashier’s check;
• Teller Checks Or Bank Drafts: A teller’s check, or bank draft, is a draft drawn check by one bank on another bank. Alternatively, it is payable through or at a bank. An example of a similar check would be a banker’s check, which is a check with the banker acting as a drawer or the duly authorized agent of the bank. This type of check is drawn on funds at the bank where the individual is an agent or officer, or in a corresponding bank where the agent’s bank has credit;
• Certified Checks: A certified check is a check which is accepted by the bank from which it is drawn. This acceptance may be made by the bank’s signed agreement to pay the check as presented, or by writing on the check which indicates that the check is a certified check;
• Traveler’s Checks: This type of check is intended to provide the instrument with the marketability of cash, as well as the safety of a bank draft. A traveler’s check makes it considerably simple to cash when the owner-purchaser is not known to the cashing entity. Additionally, the purchaser is protected against loss of the instrument if it has not been countersigned; and
• Bank Money Orders And Personal Money Orders: A bank money order is a prepaid instrument, which is similar to a check, that a person obtains in exchange for cash. These instruments can be used to send money to other individuals, and the recipient can easily deposit the money order into their own bank account. There are three parties to a money order:
  1. The remitter, or payor;
  2. The payee; and
  3. The drawee.

Personal money orders, however, resemble an ordinary check. A money order is issued with an unfilled blank intended for:

• The payee’s name;
• The date; and
• The signature of the purchaser.

When Can You Stop Payment On A Check?

Generally speaking, stopping payment on a check is possible at any time prior to the check being cashed. Once the check has been cashed by its recipient, the person who wrote or authorized the check will not be able to make a stop payment with their bank.

In order to stop payment on a check, you should take the following steps:

• Contact your bank as soon as possible;
• Notify them orally that the payor wishes to stop payment on the check;
• If the bank requests a written statement, issue them a written request as soon as possible; and
• Make notes in your own accounts regarding the stopped payment.

When necessary, you may wish to inform the recipient of the check that you have put a stop on the check payment and consider an alternate form of payment. It is important to note that some banks charge a fee for stopping payments on a check.

A postdated check is a check that can only be cashed after a specific date has passed, which is indicated on the check. This can help the issuer of the check avoid financial problems, such as bounced checks and insufficient funds. An example of this would be how a person may post-date the check for a date after their next pay day. It is generally customary to inform the recipient of such a check that it has been post-dated.

What If Someone Stopped Payment On A Check That Has Been Issued To Me? What Other Legal Issues Are Associated With Check Stop Payments?

If a person provides their bank with reasonable notice to stop the payment of a check that they wrote, their bank is required to honor those instructions. If, despite providing reasonable notice, a person’s bank pays the check, the bank would generally be held responsible for any resulting damages which the individual may have suffered.

If you have been issued a check and payment was stopped on it, you may be able to sue for damages. In order to do so you will need to file with the court, and must provide evidence regarding the check and your losses. In general, you can sue for the amount on the check as well as any additional damages. As such, you should be careful whenever you need to stop payment on your own check, as these types of legal penalties can be applied to you.

Another legal issue associated with check stop payments would be a breach of contract. An example of this would be how the contract may require the person to issue payment for a product or services on a certain date. If they make this payment with a check, but put a stop on the payment, that could constitute a breach of contract claim. Another legal issue to be aware of would be fraud and/or forgery on a check.

What Else Should I Know About Check Stop Payments?

Most states permit bank customers to make oral stop payment requests. However, other states may maintain statutes which require stop payment requests to be made in writing. If there is a requirement to have a stop payment request made in writing, and a person makes their request orally, the law generally requires that the person make their written request within 14 days of the oral request. This is done in order to prevent their stop payment request from expiring.

Once submitted, a written request to stop a payment is generally valid for 6 months. A stop payment order is another name for a stop payment request, and may only be enacted if the check of payment has not yet been processed by the recipient.

Additionally, a check which is drafted by a teller is generally drawn from accounts which are held by a bank. Due to the fact that the check is drawn from an account which belongs to the bank, as opposed to the individual’s personal account, a bank is not required to place a stop payment in such circumstances.

Do I Need An Attorney For Check Stop Payments?

If you are experiencing issues associated with stopping payment on a check, whether as the payor or the recipient, you will need to consult with an experienced and local financial attorney.

A local lawyer can provide you with relevant information regarding your state’s specific laws. Additionally, an attorney will also be able to represent you in court, as needed, should legal action be required.