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If I write a check to someone (in this case, from an LLC), on a local bank, and it goes to someone who is within 10-25 miles of me, and they take that to their bank (also local and not my bank), is there an upward limit on how long that check can take to clear on my account?

Is there an upward limit or maximum amount of time this will take from the date the recipient deposits or cashes my check until it shows on my account?

Are there limits on how quickly his bank has to process it? Or limits on how quickly my bank has to post the information to my account once they receive it?

My experience tells me that once a check is deposited or cashed that it shows up within 2 (or possibly 3 at the outside) business days, but I'm wondering if there is anything, like a law or procedures banks use, that limits the total time it can take from when it's presented to the recipient's bank until it posts on my account.

Addendum: I found a consumer service number for the Fed and called them. They didn't give an upper limit, but they told me it should be 2 days. I tried to get more insight into the process and if there's reasons it might take longer, but they were unable to give me more information, so I still don't know if this is an upper limit.


Note: I've edited this. In my experience, I've found that many times when I ask a direct question, thinking no background is needed, people say, "Why do you ask?" and when I include background, often someone says, "Well, this is the answer to what you asked, but it seems like this information will help you more." My thought was that a little extra background may help, but in this case, it seems to have diverted attention from the primary question, so I've revise the question to include only the main question.

  • If your bank told you 7 days, can't you just wait 7 days? Do you have an urgent need to close the account as fast as possible? – BrenBarn Mar 23 '14 at 6:52
  • The issue with 7 days is it means he can say, "I deposited it today," and every time he says that, I have to wait longer. I want to be sure I know what I'm talking about. For instance, if the limit is 2 days, then I know if he says he deposited it last Wednesday, he's lying. And I can't close final books until I know if I'll have to get a cashier's check. If it drags on too long, I have to pay more to renew the LLC, too. – Tango Mar 23 '14 at 6:59
  • It sounds like this is less about finances and more about the interpersonal dynamic here. How can he keep saying "I deposited it today"? You said he already said he cashed the check last Saturday. If he says he cashed it again, he can't be telling the truth both times. By Wednesday it will have been 7 business days since last Saturday. If the check has not cleared, stop payment and do the cashier's check. – BrenBarn Mar 23 '14 at 7:12
  • It's about closing the darned account and not letting it drag on - but also not cutting him off by stopping payment if not needed. And I said he claimed he deposited it - I doubt he did. – Tango Mar 23 '14 at 19:55
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    Yeah, but given what you're saying here, I don't see why you actually care about cutting him off. If he's being annoying, you should feel no compunctions about being annoying too, by stopping payment. He'll still get his money (via cashier's check later), so no harm done, just an inconvenience to him that's no more than the inconvenience he's caused you. – BrenBarn Mar 23 '14 at 19:59
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There's nothing you can do. If he has indeed deposited the check, it would appear on your account fairly quickly - I've never seen it taking more than 2-3 business days. However, a check is a debt instrument, and you cannot close the account until it clears, or until the "unclaimed property" laws of your state kick in.

If he claims that he deposited the check, ask it in writing and have your bank (or the bank where it was deposited) investigate why it takes so long to clear. If he's not willing to give it to you in writing - he's likely not deposited it. Whatever the reason may be, even just to cause you nuisance.

Lesson learned. Next time - cashier's check with a signed receipt.

Re closing the LLC: if you're the only two partners - you can just withdraw yourself from the LLC, take out your share, and drop it on him leaving him the only partner. Check with your local attorney for details.

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According to this Q&A by a Houston law professor:

The law, however, is not designed to interfere with an individual's right to stop payment on a valid check because of a dispute with someone. If he didn't deliver as promised, you do not owe the money and have the right to stop payment. Assuming that you had enough money in the bank to cover the check, stopping payment is not a crime.

I found several other pages essentially saying the same thing. All the usual disclaimers apply, I am not a lawyer, this is not legal advice, etc. In particular, laws might vary by state.

Basically, though, it doesn't seem there's any reason why you can't stop payment on the check just because you feel like it. If you then provide a cashier's check for the payment, your ex-partner will not really have anything to complain about. If you're worried about annoying him by doing this, that's a separate issue, but given the situation you describe, I don't see why you should be. If you feel he is being a pain in the neck, feel free to be a pain in the neck right back and force him to accept the payment in the manner you decide, instead of allowing him to string you along.

Note two things: obviously if you have reason to believe the guy will sue you, you should act with caution. Also, I'm not suggesting withdrawing payment completely, only stopping the check and issuing a new payment that you don't have to wait on (e.g., cashier's check).

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    As I said - this situation doesn't apply to the OP. There's no dispute about the debt in the OP's case. Stopping payment because you feel like it is the same as writing a bad check, which is a crime. – littleadv Mar 23 '14 at 21:00
  • @littleadv: The page I linked to also says, "Under the law, you may be charged with issuance of a bad check only if you give the check knowing that you do not have sufficient funds in the bank to cover the payment of the check." Again, do you have a source for your claim? – BrenBarn Mar 23 '14 at 21:03
  • Under what law? There are fifty of them in the US. Here's the instructions on the California court web page, for civil suits: sanmateocourt.org/court_divisions/small_claims/… – littleadv Mar 23 '14 at 21:05
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    You may have a lot less of a right to stop the check than you think -- look up holder in due course. If the person you are having the dispute with has endorsed the check over to another party, you can be sued by that 3rd party if you stop the check. – QuantumMechanic Mar 24 '14 at 0:03
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    Talked to one of my lawyers, as a general bit of info. Also found out the person involved is going through a major break up right now (which means he'll need the money ASAP, since they're no longer living together). My lawyer said to give him a little more time, then inform him the check is stopped and he'll have a cashier's check, via registered mail, ASAP. – Tango Mar 24 '14 at 18:42

protected by Chris W. Rea Oct 15 '15 at 23:13

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