Over a year ago, I wrote a small check ($35) to an organization at my university. They never cashed it and finally just told us that they were "lost" in the changing of the offices of the national organization, and they want us to write new checks. I no longer use the account I wrote the original check from and have been planning to close it after this situation was resolved. I talked to my bank today and they told me that I shouldn't close the account until all outstanding checks are resolved. The organization says the checks are lost and they won't be cashed, plus the date is over a year ago (so no bank should cash it...right?). Is it safe to just go ahead and close the account? Stop payment costs $15 and only lasts for 6 months, so I don't really think that is an option.
Bank normally advise customers not to close accounts if there are outstanding checks. Its just advice so that the customer doesn't land in trouble if there are outstanding checks and the account is closed.
Tell the bank that there are no outstanding checks and close it.
There is no way the organization would try to cash a one year old check. If even they did it would bounce, by reason of the account being closed. The organization's bank may charge them a penalty. There is no penalty to you from your bank as you have already closed the relationship. If you were legally supposed to make the payment to the organization, then they can chase you saying you give them an invalid check ...
So that covers all the grounds as to what can happen ...
In your case it more looks like a simple small check misplaced, even if found the accountants normally see the date before cashing, so it would never make it to the bank.
2Organizations may try to cash old checks: see this question; stale checks are cashed all the time. But I agree that in this case, no need to consider the $35 check as "outstanding" as it was lost and replaced.– StevenAug 7, 2012 at 14:57
By my definition, the outstanding check is resolved. I would not hesitate to close the account.
I agree, but do you have a source of that definition? Jul 27, 2012 at 23:16
2@MrChrister He gave the source of that definition: himself! Aug 3, 2012 at 11:05
1Yes, my source is MY GIANT BRAIN. Seriously, I don't have a source--just answering based on my experience and common sense. Aug 3, 2012 at 13:05
Working for a bank, I can tell you that people close accounts with outstanding checks all the time.
IF the check is ever negotiated (deposited, cashed, or whatever), it will be returned unpaid by your bank.
Working as a teller for the last few years I can tell you that personal checks are stale after six months (unless otherwise noted) and therefore would not be accepted. We run into this a lot with grandparents writing checks for birthdays and the like. You should be fine to close that account.
If the amount was large and you were keeping the account open you could reduce the payment by the cost of putting a hold on the check number. The hold fee will vary by bank and might not make sense for a small check.
Then send them a replacement check for the new amount, with a letter telling them what you did.
Because you will be closing the bank account I wouldn't worry about it. Just send them a replacement check from the new account. If they find the original check and try to cash it the account will no longer exist. They can't complain because they would have been trying to collect twice.
Make sure they give you in writing that the check was lost and that they will not try to cash it if found, and go ahead and close the account. Although technically stale checks can be honored (although can be dishonored just as well) by a cashing bank, its none of your bank's business, its your problem if the check is cashed from a closed account, not theirs.
I would send such notice return receipt requested and keep the papers so that if they do try and cash it you can show that you notified them not too Aug 4, 2012 at 19:35
I'm assuming they told you this because you asked, as they wouldn't know about the $35 check otherwise.
If you're really worried about it, leave the minimum balance in there and don't use the account. No big deal.