Should I Give a Post Dated Check to a Debt Collector?

Though a debt collector can and often will request that a debtor provide postdated checks when negotiating payments, it is not a good idea. Providing postdated checks exposes the debtor to many unnecessary risks. A consumer who is negotiating with a debt collector should understand these risks and the ways to reduce or avoid them.

Explanation

A postdated check is simply a check with a future date. An example of a postdated check would be a check written on July 1, but dated August 1. Often debt collectors will request that consumers send postdated checks during a debt negotiation. The collector may agree to accept three monthly payments of $300 from a consumer to settle a debt, but want the consumer to immediately send the payments with future dates on the checks.

Risks

Though a debt collector should not cash a postdated check until the agreed-upon date, some debt collectors may cash the check upon receipt. This may cause the consumer to run short on money for living expenses. Even worse, the early presentation of the check may overdraw the balance in the account or result in a bounced check, both of which will result in significant fees for the consumer. Beyond these risks, unscrupulous collectors may use the information from a postdated check, or any personal check, to attempt to gain access to the consumer's bank account.

Alternatives

Though a debt collector can request postdated checks, the consumer can refuse. Debt collectors want to receive payment for the debt and will accept payments from the consumer without the use of postdated checks. If a consumer does find a debt collector that will not accept payments, the consumer should put the offer to make payments in writing to the collector stating the consumer's refusal to send postdated checks. To reduce the risk of a collector trying to access a consumer's bank account with the information on the check, the consumer should send a money order or a cashier's check as payment to the collector.

Consumer Rights

While it is best for a consumer to not give a debt collector a postdated check, if the consumer does so it is important he understands his rights. The Fair Debt Collections Practices Act forbids debt collectors from cashing a postdated check before the date written on the check. Furthermore, when a consumer gives a debt collector a check dated more than five days in the future, the Act requires that debt collectors provide a consumer with written notice before cashing a postdated check. Consumers should report violations to the Federal Trade Commission and the Attorney General of his state. Consumers may be able to sue collectors for damages resulting from violation of the Act.