9

I recently found an uncashed paycheck issued 13 years ago in a suit I had not worn until recently. I went to the company’s bank and they refused to honor it even though the account is still good and I have an account at the same bank. The company refused to issue a new check as they say it is too old. I feel time does not void the obligation and the company could have called me about the outstanding check. Should I go to small claims court for the $768?

  • 3
    Time may not void the obligation, but it can certainly void the law's ability to enforce the obligation. Before thinking about court, find out the statute of limitations for such claims in your jurisdiction. – Nate Eldredge Nov 6 '17 at 21:33
  • 4
    This question needs a country tag – NL - Apologize to Monica Nov 6 '17 at 21:35
  • This article says that a bank is not obligated to pay a a check out of a customer's account that is more than 6 months old: smallbusiness.chron.com/long-business-checks-valid-71753.html – Rich Nov 6 '17 at 21:56
  • 3
    The important question to as is "how rich were you in 2004 that you could just forget $768?" – RonJohn Nov 6 '17 at 22:46
  • Events like these make me wonder why some countries are still so fixated on using checks. – glglgl Nov 7 '17 at 13:20
8

Under US law, a bank is not obligated to honor a check that is more than six months old.

§ 4-404. BANK NOT OBLIGED TO PAY CHECK MORE THAN SIX MONTHS OLD.

A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six months after its date, but it may charge its customer's account for a payment made thereafter in good faith.

Note the law says the bank is not OBLIGATED to honor the check, but they are not forbidden from doing so. I don't have a survey on this, but I think most banks won't honor a check after more than 6 months to a year. I've had a few occasions where early in the year someone accidentally wrote the previous year on a check, like on January 10, 2017 they dated the check January 10, 2016, and the bank has given me a hard time about cashing it.

The statute of limitations to challenge payment or non-payment of a check is 6 years:

§ 3-118. STATUTE OF LIMITATIONS.

(b) Except as provided in subsection (d) or (e), if demand for payment is made to the maker of a note payable on demand, an action to enforce the obligation of a party to pay the note must be commenced within six years after the demand.

I understand your frustration about being denied money that you presumably worked for and earned. But look at it from the other side. Suppose you wrote a check to someone, and years later they still had not cashed it. At some point you'd want to be able to clear this off your bank account. What if you want to close the account? What happens when you die? Would your heirs have to keep this account open for years ... decades ... centuries ... on the possibility that someday someone will cash this check? Realistically, there has to be SOME time limit. 6 months should be plenty of time for someone to make it to the bank with a check.

If the company still exists then you could argue they have a MORAL obligation to pay you. If they have records that show that they did indeed give you this check and you never cashed it there'd be no question that you were trying to cheat them. But a moral obligation and a legal obligation are two different things. Legally, they paid you, and it's your problem that you failed to cash the check. You could talk to a lawyer, but if you live in the US, I think you are out of luck. (Of course other countries have different laws.)

  • 2
    The question is not (or not only) whether the bank is obligated to cash the check. The question is whether the employer is obligated to pay the money that was agreed upon as part of the past employment. – BrenBarn Nov 7 '17 at 5:04
  • @BrenBarn Well, the text of the question was about the check. But okay, if we agree that the check is no longer cashable, a fair follow-up question is, Is the company legally obligated to issue a new check or other form of payment? At that point I'll defer to a lawyer. My guess is that the answer is no. The company fulfilled their obligation when they gave you the check. If you lost it, that's not their problem. If they paid you in cash and you lost the money, they surely wouldn't be obligated to pay you again. But I don't know, I'm just guessing. – Jay Nov 7 '17 at 18:58
  • Second thought: There's a statute of limitations on suing to enforce a contract. This varies from state to state in the US, but is generally 4 to 10 years. Other countries will have their own limits. So even if he could have sued to get a new check when he lost the first one, the statute of limitations has almost surely expired to bring a lawsuit. Unless the OP is lucky enough to live in Kentucky, where the limit can be as long as 15 years. – Jay Nov 7 '17 at 19:04
1

Even going to small claims court the burden would be on you to prove that they never paid you. The 13 year gap would be the core of the argument by the company that they have no obligation to keep records from 13 years ago. That is far longer than they need to keep them for tax purposes.

Even if they sent you a replacement check the next year, that happened to me once, the record of that transaction would have been 12 years ago.

The bank will not cash it because of the date being 13 years ago. As we move forward with more and more of the checks being deposited via phone/scanner the banks will be even less likely to handle stale checks because the fact you have the check in your hand doesn't mean it wasn't cashed.

1

If this is in the United States, there are laws governing business behavior when they have recorded expenses (checks, bills, etc) which are never withdrawn or deposited. A business is required to turn over these funds after a certain time frame to the state government as a part of their business tax cycle. (One caveat- these laws vary in age by state, and 13 years is a long time. You might still be out of luck for an amount so old..)

There are even businesses which have cropped up to search for "lost money" (for a fee, of course) that your great uncle might have left behind and which now sits in a government holding account somewhere. It's not necessary to go through the third parties though, because the United States posts this information for the world to see. A good starting place is:

USA.gov Unclaimed Money Tool

Do as much legwork there as you can. You could even attempt to contact the former employer (you said the business accounts still exist) and in a very friendly, non-confrontational manner ask them what their procedures are and would have happened to your paycheck funds. As others have stated, they are under no legal obligation whatsoever to fix your problem for you, but who knows, you could get lucky and they might voluntarily help you out! You're looking for information not cash, so politeness, patience and understanding are your tools.

If all else fails, you could try one of these 3rd party services. Here you run into diminishing returns as paying fees to search for money which might not exist just puts you further in the red.

  • 2
    Ditto "diminishing returns". Like if you have to hire a lawyer, his fees could quickly exceed $700. My pastor once told me about someone who asked his advice whether he should fight his ex-wife for their car in the divorce proceedings. He estimated it was worth $2000. Pastor told him it wasn't worth fighting over, let her have it. His lawyer talked him into fighting. He ended up paying $6000 in legal bills trying to get the $2000 used car ... and lost. – Jay Nov 8 '17 at 19:08

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.