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Avoid Check Stop PaymentUnder prevailing New York law, a remitter (purchaser) of a bank check can stop payment after ninety days from the date of issuance. There are certain criteria that must be met in order for that direction to be effective.

The stop payment is effective if the remitter, or the payee, delivers to the issuing bank a written order to stop payment, which shall describe the item with reasonable certainty and an affidavit of the remitter or payee containing an averment that the check was destroyed, its whereabouts can not be determined, or it in the wrongful possession of an unknown person or a person that can not be found or is not amenable to service of process.

Under New York law, a bank is required to stop payment at the request of a remitter or payee if the stated criteria are met, but only after ninety days from issuance. Under any other circumstances, the law provides the bank the discretion as to whether or not to stop payment. In deference to a good customer of the bank, that discretion might be liberally given.

It would appear that the most effective way of avoiding the stop payment problem would be to timely deposit bank checks you receive. In the event that the remitter later claims one of the stated grounds under the prevailing law, the receiver of the check can show a timely deposit, negating the issuing bank’s ability to comply with the stop payment order.

Please contact Les Taroff or Elliott Portman for additional information on this subject.

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