What can I do ifI cashed a check for a friend but now they have stopped payment on it?

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What can I do ifI cashed a check for a friend but now they have stopped payment on it?

I cashed a check for one of my friends because they said they did not have a bank account. The bank cashed it and then days later payment was stopped on the check. Now the bank wants me to pay the money back. What can I do? I did not receive any of the money.

Asked on November 12, 2011 under Bankruptcy Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) You have to repay the money to the bank; when a check is stopped, the bank may receive back the funds paid out on it. There is no doubt of this.

2) You can sue your friend, if he or she does not return the money to you; he or she would have no right to keep the money when the check was stopped.

3) Depending on why the check was stopped, you may be able to sue the person who stopped it, if he, she, or it (if it was a business) did not have good grounds to stop it.

In the future, if you do ever cash a check for someone, do NOT give them the money until you are positive the check has been honored.


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