Legal Question in Credit and Debt Law in Missouri
NSF checks on a joint account-who is liable?
I was on a joint checking account with my daughter & she wrote several nsf ckecks before I found out about it. I had to pay the fees to the bank to close the account as it was joint & they said I was also liable for them. Now my daughter has disappeared. I'm receiving letters & calls because the counter checks my daughter bought had both our names on them. I don't do things like this & she is an adult on hard times that has made a bad thing worse.
I've excellant credit & don't want this to hurt my credit rating, but I can't afford to pay over $500 in nsf checks & fees after paying over $300 in bank fees.
Questions:Can these folks make me pay them since she signed the checks & is an adult? Can they turn my name over to the credit reporting agencies as if I had signed the checks? (One of them is threatening the latter item, even though I wrote them & explained I didn't sign the checks.)
Ive given them her last known address & she doesn't have a phone. I contacted the prosecuting atty for the county where she wrote the checks. They say I'm not liable, but what do I need to do to keep my name clear on my credit history? She has written 8-9 checks. I've only been contacted by 3 companies with checks. Please help. Thank you.
1 Answer from Attorneys
Re: NSF checks on a joint account-who is liable?
You are most likely liable on any checks written before you closed the account. Checks written after you closed the account are not technically NSF, but rather, written on a closed account.
When you closed the account, you terminated your liability to the bank and other third parties for any checks written after that date. If checks were written before that date you are probably liable on them because joint owners of an account are jointly liable for checks written on that account, irrespective of whether they knew or could have known that the other party was writing those bad checks. The law makes your daughter your agent in that situation. It probably seems unfair, but an innocent seller who sold something to your daughter and accepted the check that had your name and her name both on the check is allowed to rely on your representation that you are good for the funds.
That all changes once you closed the account because now while the innocent seller may not in fact know that the account is closed, he could have ascertained that fact before he accepted the check. He failed to do so. He then takes the risk and must assume the risk of collecting from the individual who wrote the bad check.
Also keep in mind that you probably signed a contract (even though it may not have seemed like one) when you opened the joint account. That contract controls what you are liable for with respect to the bank. Since you terminated the contract when you terminated the account, that should terminate your liability, but a different result might happen if langauge in the contract requires you to be responsible for all checks presented on the account, or similar language.
Your best bet is to take this mess to an attorney and seek legal advice to help you untangle this situation.
I hope this is helpful.
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