Laws on Post-Dated Checks

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Post-dated checks are promissory notes written to pay for something over time. It could be for a service, a piece of merchandise or an outstanding debt. Debt collectors usually offer debtors the option of using post-dated checks, but before you do you should know what your legal responsibilities.

What Exactly is a Post-Dated Check

  • The legal definition of a check as defined by the Universal Commission Code (UCC) is a "draft payable on demand and drawn on a bank" (subsection 3-104). A post-dated check therefore is a draft that is dated for sometime in the future, not the day that it was written and signed.

Your liability

  • With a post-dated check, you are promising a creditor that she will be able to process your check on the date you indicated, and that there will be money in the account against which the check was drawn. If the check is returned for insufficient funds, it is the same as having written a bad check and you are liable for the same consequences.

Bank's Liability

  • According to subsection 4-401 of the UCC, your bank may process post-dated checks as soon as they are submitted, unless you give your bank enough notice otherwise. This means that after you give a post-dated check to a creditor, he ould deposit that check at any time and might receive payment for it if there are funds in the account to cover it. If you are going to use post-dated checks, therefore, you might consider giving your bank several day's notice about it--including the check numbers you will use--before you hand the check(s) to your creditor.

Your Protections

  • Although a bank may process a post-dated check before its date, you are still protected by the Fair Debt Collections Practices Act. According to this act, creditors may not process a post-dated check before the date indicated on it. The act also states that creditors may not demand post-dated checks by threatening legal action against you. Knowing this ahead of time will help you in your negotiations with a debt collector.

Debt Collectors

  • Debt collectors only receive their commission once you pay your debt. Therefore, many of them will use whatever means they need to in order to get you to pay up. Demanding post-dated checks is a common practice for debt collectors. If you agree to their demand, it will legally bind you to a payment plan you may not be able to support over the long-term. Make sure to think through carefully--without the pressure from the debt collector--whether ving the collector post-dated checks is right for you.

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