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Simple English definitions for legal terms
no funds
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A quick definition of no funds:
When you write a check but there isn't enough money in your bank account to cover it, the bank will mark the check with "no funds". This means that the check can't be cashed or deposited because there isn't enough money to pay for it. It's important to make sure you have enough money in your account before writing a check to avoid this situation.
A more thorough explanation:
Definition: An endorsement marked on a check when there are insufficient funds in the account to cover the check. It means that the person who wrote the check does not have enough money in their account to pay for it.
Example: John writes a check for $500 to pay for his rent, but he only has $200 in his account. When the landlord tries to cash the check, it comes back with a "no funds" endorsement because John did not have enough money in his account to cover the check.
This example illustrates how a "no funds" endorsement works. It is a way for banks to inform the recipient of a check that the person who wrote the check does not have enough money in their account to pay for it.