postdated check


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postdated check

n. a check delivered now with a written date in the future, so that it cannot be cashed until that date. The danger to the recipient is that such a check is legally only a promissory note due at the later date, and if the account is closed or short when the check is presented at the bank, the payee has no rights to demand payment by the bank or claim that the delivery of a bad check was criminal.

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You may not accept a postdated check that is dated more than five days away.
Payday lenders, who typically require borrowers to endorse a postdated check, trap borrowers in a cycle of debt at annual percentage rates of 400 percent.
Payday lenders make borrowers sign a postdated check to borrow an average several hundred dollars until their next payday, usually a period of two weeks.
Payday lenders typically take a postdated check from a borrower for the amount borrowed plus a fee, payable on the next payday.
At a typical payday shop, a person short on money before payday borrows, $255 by writing a postdated check for $300.
If the check does not clear, the lender threatens to enforce or does enforce the bad check statutes, even though the Illinois laws do not apply to a postdated check known to be worthless when issued, both because such a check is not within the terms of the statute(17) and because the lender intends to extend credit, and does not rely on any representation by the borrower that there is money or will be in the account, and understands that there is a high degree of risk.
In Illinois, the bad check statute does not even apply to a postdated check which the lender obviously knows is worthless when issued.