Can a bank refuse to cash a check if we were named in a Chapter 7 bankruptcy that has been closed out? They said we had to pay the debt off before they would cash it, but they have done it with no problem many times before this.
Generally speaking, a bank is a private entity and can choose with whom it will do business, just as you can. It does depend on what bank the check is drawn on and who the payee is.
If the check was drawn on that bank and the payee was a customer at the bank, the bank should cash the check. If the payee on the check is cashing the check and doesn't have a deposit account there, many banks will refuse it and tell the payee to go to his/her own bank. Some banks will see the check as being drawn on them and interpret the Uniform Commercial Code (UCC) as requiring them to cash it. Some banks will cash it, but only for a fee because the payee is not a customer there. Texas courts have allowed the charging of a fee.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
Generally speaking, a bank is a private entity and can choose with whom it will do business, just as you can. It does depend on what bank the check is drawn on and who the 