Have I broken a law here, and what are my options?

Since the check was no good, you are liable. Otherwise, anyone could go around kiting checks to get money. Since the bank told you the funds were available, I think they should drop the fees. I“m sorry this happened to you.

Once you endorse a check, you accept any and all liability for the item.

You haven’t committed fraud, but recovering the funds from the maker are, technically, your responsibility. I hope that your bank will help you with this process, but I don’t know that they have an obligation to.

If you just walk away from your obligation, then you may have legal trouble.

I wonder why they didn’t put a seven day hold on that check. But that’s the banker in me.

File a claim against the issuers of the bounced check. That is illegal. Everything after that is for you to straighten out. Time to lawyer up!

What a mess. Sending a hug!

(Sent to Adirondackwannabe.)

The law usually reverts back to intent. The bank didn’t intend to make an usecured loan to you. So they can ask for the funds back, and if you don’t comply you’ll be the one in hot water. You have a claim against the ones that gave you the check. There are a couple of ways that checked could have been returned. Can you find out the reason.? What a mess. I always give big checks extra time to clear, but the bank screwed up too, so you shouldn’t have to pay any fees. Document everything very carefully. Good luck.

How do you go about getting the money back on the loan you paid off?

What @Adirondackwannabe says sounds right to me.

If you’re asking this as a thought experiment, I think that there simply isn’t a single outcome of for this situation, which every person would experience. Much of what will happen next for you will depend on your prior relationship with your bank and all of the other institutions involved, as well as how you interact with these people, both initially and as it unfolds.

If you were a new client at the bank, or if you had had repeated problems with maintaining a balance, or defaulting on your own financial responsibilities, or if you were acting angry or “twitchy” with them, you would probably be in a very different position.

Technically, even if worse came to worst, I think that they would reserve charges like “fraud” as a last resort – first, they would ask you to return the money, then sic collections on you, etc., etc. I think it would take a long while for anyone to press charges.

And I hope it gets resolved quickly for you! What an awful situation to be in.

I’d say go to your bank manager. Be open and honest with him or her. They’ll advise you on the best course of action, and talking to them also lets the bank know you taking this seriously. I’d also advise keeping them (the same manager every time) in the loop.

I would go to the manager of your bank, explain the situation, and ask him to give you a loan against your house for the amount you withdrew to pay off the mortgage. At a rate less than the previous loan, as there are certain to be fees involved.

As far as I’m concerned you and the bank are equally at fault for accessing the funds too soon, and the goal should be to restore the situation to what it was a week ago.

YOu also have the right to sue the person who gave you a bad check for any fees accrued in this matter. Lawyer time.

I got a call from the bank saying they found the mistake, and that everything will be set right tomorrow morning.
What a stressful 2 days!

Oh, @filmfann! My heart was starting to pound for you! So was the check OK after all?

Ugh, good. I didn’t have a good solution other than hope like hell you bank likes you and hasn’t discharged the collateral documents.

I’m glad it’s all come right in the end, what an awful position to find yourself in, no matter how short lived : ^)

Man, I have a headache now!

“I got a call from the bank saying they found the mistake…”
WHAT FREAKIN MISTAKE??, @filmfann
Sorry for screaming.

That ice bag on your head should help, @Dutchess_III.

For two days, we had my bank saying the check had bounced, and the issuing credit union saying the check had cleared. Yesterday afternoon the two figured out the problem (and neither lays claim to the mistake), and have rectified it. The fees for bounced checks from my account have been reversed. Now I have to contact those businesses that have the incorrectly bounced checks, and tell them to resubmit them, or give them new payments.
Both financial institutions refuse to give me a letter saying this was not my fault, since it would indicate it was their fault.
But everything is being put back together, and I am happy for the moment.

@filmfann Sorry you had to go through this but glad it’s clearing up.