You have a huge number of tasks to complete every day; it’s understandable that some things fall though the cracks, like forgetting to pay your cable bill or cashing an odd cheque.
But unlike the cable bill which actually takes money from you, a cheque will send some your way. So what happens when you’ve dragged it for so long that your cheque’s actually expired and the bank has rejected it?
Let’s take a closer look at ‘stale’ cheques and how you might still be able to get your money.
How Long Do You Have Before A Cheque Expires?
From the date written on the cheque, you will have six months to cash it before it expires. For example, if a cheque has been issued on the 1st of May 2017, you’ll have till the 1st of November 2017 to cash it before it expires.
However, accountholders can instruct the bank to shorten or lengthen the cheque’s expiry and actual the duration for the cheque’s validity will be printed on the cheque itself.
After six months or when the cheque has expired, you will not be able to cash your cheque successfully.
So What Should You Do With An Expired Cheque?
Well, the most obvious and easiest solution is to ask the cheque issuer to simply write you a new cheque. However, in situations where that is not possible such as if the person issuing the cheque has passed away or if they refuse to repay you, can anything be done?
The short answer is yes. But it might involve you taking the legal route to get your money. While a cheque technically ‘expires’ within a certain period of time, it does remain valid for up to six years depending on the law of the region (e.g. Peninsula Malaysia, Sabah or Sarawak) to prove a debt.
So you can use your physical cheque to prove that a debt is owed to you and go through the courts to get your payment released. Unfortunately, that can be costly, time-consuming and moreover, if the monies owed is just a small amount, it might not be even worth the hassle and cost.
What You Can Do To Avoid Dealing with Stale Cheques
Rather than go through the trouble of legal proceedings or chasing for payment, here are a few smart ideas to stay on top of cheque payments in the future:
1. Cash cheques as soon as you get them. It’s a good idea to cash your cheque quickly as you’ll have fewer problems to deal with such as damage to the cheque (where the bank might not accept it) or it being dishonoured due to insufficient funds.
2. Set a reminder. If for some reason you are unable to cash your cheque quickly, just program a reminder on your phone to prompt you to cash your cheque before the due date. If you are accepting a personal cheque, do inform the cheque drawer when you intend to cash it as a courtesy and so they’ll ensure that their account has enough funds to allow the cheque to clear.
3. Ask for assistance to cash your cheque. If you are overseas or unable to cash your cheque, request for it to be banked in to your account. Of course, the drawer does not have to oblige you but it doesn’t hurt to ask for help when you need it!
4. Request an alternative form of payment. Cheques cost money for the issuer, a bit of hassle for you and is environmentally-unfriendly, so if possible, you can always ask to be paid either by bank transfer or cash. This way you won’t need to concern yourself with expiry dates and the like.
Once you’re paid, it’s best to keep your payments in a savings account. If you don’t already have one, it might be high time to finally open an account as there are tons of convenient benefits that you are missing out on!
Check out our comparison page to find a rewarding savings account that is just right for you!