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JudyKayTee · Mar 20, 2013, 08:53 AM

I can't find the answer to this one - person #1 obtains a teller check payable to person #2. Person #1 has bank account at the financial institution where the check was issued, which bank account has tax liens against it. Person #1 used that account to fund the tellers check.

Can that check be seized for the tax liens OR is it somehow protected funds, untouchable, because the funds are now in a teller check?

excon · Mar 20, 2013, 09:13 AM

Hello Judy:

Well, of course, I don't know. But, that's never stopped me before...

It would seem that the tax authority OWNS the funds in the account. Apparently, the bank erroneously funded the "teller check" from an account it should have KNOWN couldn't be accessed. Therefore, the bank is liable.

Once the bank WROTE the check, how would the taxing authority or the bank seize it? I wouldn't think they'd have an opportunity. Would they dishonor the "teller check" once it's presented for payment? I don't see how they could. It's NOT a counterfeit. It's a mistake, and it's NOT the mistake of the purchaser of the check, nor the person and/or institution who accepted the check.

How'd I do?

excon

JudyKayTee · Mar 20, 2013, 09:21 AM

You did well - my "gut" tells me that until the check is cashed it is open funds, available to the person who has liened against the account. I just can't find any source.

The bank tells me that a tellers check is not guaranteed funds - but that doesn't sound right.

excon · Mar 20, 2013, 09:42 AM

Hello again, Judy:

my "gut" tells me that until the check is cashed it is open funds, available to the person who has liened against the account

It could be so, but how would they get the check? They couldn't intercept it before it got deposited into some bank, and then presented for payment.

Apparently, the bank is saying that it would REFUSE payment when the check was presented.. Can they? Oh, I think they WOULD to cover their error, but if they were challenged, I'll bet they'd lose.

Excon

JudyKayTee · Mar 20, 2013, 09:44 AM

Right, they couldn't get their hands on it.

Good points.

Thanks.

LisaB4657 · Mar 20, 2013, 08:39 PM

Once a bank issues a "teller's check" it is guaranteed to be paid by the bank, despite what the person at the bank told you. It is the same as a bank check or cashier's check and as long as it is not fake or forged, it's as good as certified funds. If you are the payee, walk into any branch of that bank, show proper ID and they have to cash it. If they refuse, sue then and you'll win.

AK lawyer · Mar 20, 2013, 08:58 PM

Is this homework? :)

JudyKayTee · Mar 21, 2013, 08:12 AM

Wish it were homework - no, it's a private mortgage which I held which was (in theory) paid in full by teller check. The funds were withdrawn from the mortgagor's bank account and he obtained a teller check payable to me.

I was told that these are not guaranteed funds and are subject to lien.

I believe that these are guaranteed funds, and if the bank allowed the withdrawal and, basically, conversion into a teller check, it's negotiable and the funds are no longer accessible by the mortgagor.

My Attorney has it - but I wondered.

LisaB4657 · Mar 21, 2013, 08:21 AM

I would walk into the bank with the check and my ID and cash it immediately.

JudyKayTee · Mar 21, 2013, 08:26 AM

I will wrestle it from my Attorney and do just that -

Thanks everyone.

excon · Mar 21, 2013, 08:31 AM

Hello again,

Legal Lisa is right on, of course. Until they refuse to honor it, if they're going to, it's all TALK.

By the way, Judy, what made you aware that the bank WOULDN'T honor the check? Was it just a teller who told you that? How did that come about? Did you present it for payment?

excon

JudyKayTee · Mar 22, 2013, 07:08 AM

I had asked for certified funds (and the paperwork requires certified funds) - and got the tellers check. I am not willing to sign the release until/unless the funds are verified.

When I went to the bank and asked - I cannot cash the check according to the contract without exchanging paperwork (the mortgage discharge) I was told the account is frozen by a lien. That includes this uncashed tellers check.

I am unable to get the background on the lien - before or after the transfer and tellers check. My Attorney can, so I sent the check to her and she is sorting through it.

It makes no sense to me that a tellers check, even uncashed, is the property of the "owner" of the bank account until it is cashed.

My Attorney will sort it out - in the meantime I can't find anything and both my Attorney and I can't be contacting the Bank - she's in charge, I'm just asking.