Check, Stop Payment

This review list is offered to educate you about the document and to guide you in preparing it. This Stop Payment of a Check letter is used by an individual or business to notify a bank that they wish to suspend payment on a check or to confirm an earlier conversation.

By law, anyone with a checking account has the ability to direct his or her bank to halt payment of a check. This privilege is codified in Article 4-403 of the Uniform Commercial Code (UCC), which each state has accepted. Each state has adopted two versions of this statute over the years, with the latter version providing clarity to the earlier one. The fundamental rules are as follows:

1. The order to halt payment may be delivered orally or in writing. An oral order is only valid for 14 days. A written order (such as this letter) is valid for six months until it is renewed in writing for a further six months, and so on.

2. Due to the urgency of the situation, fax, hand deliver, or call in your stop payment. Maintain proof of delivery, such as a confirmation receipt from your fax machine, in a file dedicated to the subject.

3. An effective stop payment request must be made in a timely manner in order for the bank to honor it. In other words, prior to the payee depositing the check, the order must be given. However, if the bank pays in violation of your request after receiving sufficient and timely notice, the bank is accountable for your loss.

4. Caution: Refusing to pay a cheque without a valid reason might result in legal and criminal consequences. For instance, if you pay Wal*Mart with a check and subsequently discontinue payment without cause, Wal*Mart may seek prosecution for passing a fraudulent check and sue you in civil court for collection with damages. Ascertain that you have a valid and adequate reason to halt payment, such as the payee’s default, fraud, failure to deliver the correct goods, or other significant issue.

5. Bank costs for this transaction typically range between $10 and $25, depending on the bank. Generally, the cost is lower the smaller the bank. If you are a loyal customer of a small bank, you may qualify for a charge reduction or waiver. Generally, a large bank will follow its own guidelines. Period.

Check, Stop Payment

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Check, Stop Payment

Date:

Dear Sir or Madam:

You are hereby directed to stop payment on the following check under the name: ____________________________.

Account number: ____________________
Check number: ______________
Amount of the check: $______________.
Payee of the check: __________________________________________

This order is made under and subject to the provisions of Section 4-403 of the Uniform Commercial Code of the State of ___________.

I have just cause for this Stop Payment under federal and state laws.

Yours very truly,
______________
Signer on Account

cc File and Payee on Check

Check, Stop Payment
Review List

This review list is provided to inform you about the document in question and assist you in its preparation. This Stop Payment of a Check letter is used by an individual or company to notify a bank to stop payment on a check or confirm an earlier conversation to do so.

Anyone with a checking account is guaranteed the right by law the right to order his or her bank to stop payment of a check. This right appears in article 4-403 of the Uniform Commercial Code (UCC) as adopted by each state. Two versions of this law have been adopted by each state over the years, with the later version adding some clarity to the earlier one. The basic rules are):

1. The stop payment order can be given orally or in writing. An oral order is good for only 14 days. A written order (like this letter) is good for six months, unless renewed in writing for another six months, and so on and so on.

2. Since time is critical, fax, hand deliver, and call in your stop payment. Keep evidence of the date of delivery, such as the confirmation receipt from your fax machine, in a file relating to the subject.

3. An effective stop payment request must be timely in order to be honored by the bank. In other words, the order must be given prior to the payee cashing the check. If, however, the bank improperly pays contrary to your order, after proper and timely notice, the bank is liable for your loss.

4. Caution: Stopping payment of a check without good reason can subject you to civil and criminal liability. For example, if you pay Wal*Mart with a check and then stop payment without justification, Wal*Mart can ask that you be prosecuted for passing a bad check and sue you for collection, with damages, in civil court. Make sure you have a good and sufficient reason for stopping payment, such as default by the payee, fraud, failure to deliver the proper goods, or other major problem.

5. Bank fees for this transaction run between $10 and $25, as a rule, depending on your bank. Generally, the smaller the bank the smaller the fee. If you are a good customer of a small bank, they may reduce or waive the fee. A large bank will generally just go by their own rules. Period.