Personal Cheque Cashing Overkill

okerho

A friend of mine is under a tremendous amount of debt.
They decided to cash some personal cheques in some local cash for cheques shops, (somehow they managed to have several chequebooks for one bank account)
They raise several thousand pounds by cashing all the cheques.
They used this money to immediately pay off people they owed money who were threatening them.

But now they dont have any money in their account to pay for the cheques when they will be cashed. They were hoping to borrow some money from relatives to put into the bank to pay the bank off, but as of yet they have been unable to get the money from them.

If they are unable to put the money into the bank in time is the bank going to treat this as fraud?
Or will the cheque cashing companies pursue the debts?
I have suggested they go bankrupt, but Im not entirely sure what is the best course of action.


Would appreciate some opinions.

Tixy

Hi okero

What sort of level of debts do you think you friend has? do they still owe money to people aside from these cheques? without knowing quite a lot more about their circumstances its impossible to say whether bankruptcy would be an solution or even an option at all. There may be other more suitable options for their circumstances such as a debt relief order or a debt management plan.

I would suggest that they contact one of the free debt advice charities asap for some advice. https://forums.moneysavingexpert.com/discussion/2077631

UnderPressure

If the cheques were handed over with a guarantee card then to "my" knowledge the bank will pay them and your "friend" will end up with a huge unauthorised overdraft which of course will grow in size with charges etc etc etc etc and eventually probably passed to some DCA for collection.

If they were just cheques with NO guarantee card (which I think is highly unlikely but you never know) then it will the individual shops that are out of pocket and they will then have to make their own arrangements for collection via DCA or county court.

"IF" he has done this with multiple cheques in the same shop and the shop ends up out of pocket then I suppose there is a small chance of them reporting your "friend" to the police for fraud, however we are a long way from that and TBH there would be nothing stopping your frienddoing this if he was expecting money, the bank say something along the lines of "you should not issue a cheque whehn you do not have the funds in your account available" when in reality Im sure a LOT of people near payday still use a cheque as a way of getting through.

Hope that helps, who was threatening him by the way? I take it they were not a "usual" kind of lender??

jockinleeds

Woow..

Potentially - all of the above!
I would imagine that if the cheques are not honoured then the 'cash for cheques' mob will come calling instead.

It is an established legal rule that dishonoured cheques are to be treated as cash payments.

Expect court action pretty quick!

I would phone the bank concerned and make them aware of the situation - perhaps mentioning a perceived threat of violence from a nasty creditor and take it from there. Dont forget there will likely be charges from th bank on top of what has not been honoured.

Hope it works out..

podperson

Does your friend have any money at all for these debts? These companies will extend the cheques if asked, there will another fee for this but will probably be less then bank charges they will get so if they are expecting to get some money from family very soon then this may be option.
If they can't do this then depending on the account and bank one of two things will happen. Either the cheques will bounce, in which case the cheque cashing companies will be chasing you friend for the money. Or the bank will honour the cheques and they will be massively overdrawn. If this is their normal bank account that has wages etc paid into then they may need to open another one asap as otherwise any money paid in will be swallowed up by the amount owed and they will have nothing to live on.

okerho

Thanks for your help finguring out this mess.
All of your advice is greately appreciated.

Approx £44k unsecured is owed to a couple of high street banks.
They live in rented accomodation, to my knowledge they are not a home owner.
They were leasing a car a few months back but not anymore, they currently use public transport.
A cheque guarantee card was used with the cheques.

If the cheques bounce and the cheque cashing companies persue the debt, is this done via correspondence and calls or will they send some thugs round?

UnderPressure

If a guarantee card was used the bank shuld clear them all leaving your friend with a huge un-authorised overdraft.

I do seem to remember reading somewhere though that if he has used mulitple cheques in the same shop if they cheque numbers were in sequense ie 0001,0002,0003 etc then they may suspect some kind of foul play and not honour them, not sure how correct this is it is just something that has popped into my head lol

Fingers crossed it will result in a big unauthorised overdraft, you really need to persuade your friend to come to this forum and read this board and also the bankruptcy board, although he has managed to avert a nightmare this time he is fast running out of options and needs to be pro-actively dealing with his debts, robbing peter to pay paul is all well and good until peter runs out of money..................

podperson

If a cheque guarantee card was used then the banks should honour the cheques which will give your friend a massive overdraft. Would definately suggest opening a basic bank account elsewhere to live out of in the meantime and they need to be talking to the bank about trying to pay the money off in installments.