A check is a written instrument that is signed by the drawer (i.e., writer of the check) and payable on demand to the bearer (i.e., the person named on the check). If you deposit a check into your account, you are assuming the risk of non-payment (i.e., if the check bounces). When you write a check, you are giving the bank or financial institution the power to decide whether or not to pay you back (i.e., if the check bounces, you will lose the money you deposited into your account). If you want to ensure that your money is safe and you will be paid back, you should not write a check without first consulting a reputable legal counsel.
When Is A Check Not Worth Writing?
Generally speaking, there are three situations in which it is best not to write a check:
- If you are in default of a loan agreement
- If you are a corporation and you do not have enough money in your account to cover the amount you are trying to write
- If someone will not cash the check you write because they do not have the necessary funds in their account (e.g., a business partner who has not yet opened up an account with the bank)
In other words, you should not write a check when:
- Your loan is paid back (provided you satisfy all the terms and conditions of your loan agreement)
- You have sufficient funds in your account to cover the amount you are trying to write (e.g., your account is more than 50% funded)
- The company you are writing the check to has enough money in their account to cover the amount you are trying to write (e.g., they have a steady cash flow and can afford the loss of a customer)
- The check will be honored by the bank or other financial institution (e.g., you are writing a check to cover the cost of a luxury item such as a diamond)
- There is some doubt as to whether or not the company will honor the check (e.g., the company is located in a different state than you and the checking account is in a different state or country)
What If I Deposit A Check With Only One Digit?
If you happen to deposit a check with only one digit, you might find that it is not going to clear your account (i.e., for the purposes of this article, a check with only one digit is considered to be “worthless”). The reason behind this is that when a check with only one digit is deposited, the bank will usually put it into collections and you will have to pay a fee. If you want to prevent this, make sure that all the checks you write have more than one digit or that you write the checks in a different order so that the last check deposited has at least two digits.
Is It Worth It To File A Lawsuit Over A Bad Credit Transaction?
While some lawsuits filed over bad credit transactions are frivolous (i.e., the bank didn’t actually violate any laws), you should not file a lawsuit over a bad check simply because the bank denied your credit application.
If you decide that you want to file a lawsuit over a bad check, the first thing you should do is contact a reputable legal counsel so that they can examine the validity of your case (e.g., there is no fee for this service; you will have to pay out of pocket). Once your legal counsel determines that there is some merit to your case, they will draft the necessary documents and you will submit them to the court for filing.
In general, if you decide that it is not worth pursuing the matter through litigation (e.g., the bank denied your credit application and there is no evidence that they did anything wrong), you should not threaten the bank with litigation (i.e., do not file suit before proving that you tried to work things out privately).
Sometimes, banks and credit card companies are not willing to work things out informally and they simply want to avoid any legal hassles. In those situations, it is usually best to file a small claim and let the court decide the matter. You can find information about small claims courts at your local district court or city hall.
What If I Try to Cash A Check And It Turns Out That The Amount Is More Than I Can Afford?
In most situations, if you try to cash a check and the amount is more than you can afford, you will not be able to cover the check and the bank will call your attention to the discrepancy (i.e., the bank may indicate that there is insufficient funds in your account to cover this check). In some cases, the bank may even contact the company that issued your loan to notify them that you are trying to cash a check that is beyond your means (e.g., if the company is located in a different state than you, it will be easier for them to dispute the check with the bank).
In order to prevent this situation, you should keep a record of all the checks you write (e.g., save them to an electronic fund transfer (EFT) or paperless banking system). This will make it much easier for you to review your checking account to ensure that you are always aware of the exact amount of money you have in your account. In the event that you did not save these records, you will not have proof of how much you can afford to spend and you might find yourself in a financial pinch.
What Is The Difference Between A Provisional And A Temporary Bank Account?
A provisional bank account is an account that awaits the creation of a business or investment partnership (i.e., if you are a limited partner in a partnership, you will have a temporary bank account). When you open up a provisional bank account, you are not required to provide any collateral (i.e., you do not have to give the bank a mortgage on your home or car in order to secure credit) and you are not required to make any monthly payments (i.e., the bank will not require you to pay any interest in order to use the account).
The advantage of a provisional bank account is that you can open up as many of them as you want (i.e., you can have multiple provisional accounts) and you are not limited by the number of “real” (i.e., actual) bank accounts that you are allowed to have.
A temporary bank account is an account that you open up as soon as you receive your first paycheck from your employer. In order to open up a temporary bank account, you will need to provide some form of collateral (e.g., a mortgage on your home or car) and you will have to make a deposit into the account (i.e., the account will not be “free” money – you will have to put money in it).
The advantage of a temporary bank account is that you are not required to have any collateral in order to open it and you do not need to make any monthly payments (i.e., the bank will not require you to pay any interest in order to use the account). When you have money in a temporary bank account and you want to withdraw it, you will need to pay a small fee (i.e., in most cases, you will have to pay a fee of $10 or more).
How Do I Know The Account I Am Opening Is Scam-Free?
If you are not sure whether or not the account you are about to open is legitimate, the best thing to do is contact the bank directly. However, in most cases, online checking accounts are legitimate and there are no substantial red flags (i.e., the only reason that your bank account might be flagged is because you are trying to scam the bank in some way – typically, the banks are pretty good at weeding out these attempts to defraud).
As a general rule, it is not wise to open an account that you cannot afford to pay for out of pocket (i.e., you should not open a checking account with a credit card – you should open up a savings account with a debit card or a high-interest-bearing account with a checking card).