The Illinois Banking Act states that banks may accept deposits from minors and that “the rules and regulations of such bank with respect to each such deposit and account shall be as binding upon such minor as if such minor were of full age and legal capacity.” 205 ILCS 5/45.1. While that provision would protect you as to a checking account, it would not apply to a loan, nor do we believe that it would apply to an overdraft on a checking account. (Note that Section 45.1 was enacted long before overdrafts became a common account feature.)

In Illinois, the age of a majority is eighteen. The general rule is that a loan agreement with a minor is not enforceable, because the loan agreement is voidable by the minor party. Dixon National Bank v. Neal, 5 Ill.2d 328, 336 (1955). There are exceptions to this general rule. One is when the minor has been emancipated by a court order. 750 ILCS 30/5. Another is that a loan with a minor is enforceable if it is entered into for the purpose of obtaining necessities. Fitzpatrick v. Ill. Dept. of Public Aid, 52 Ill.2d 218, 221 (1972), citing Bedford v. Bedford, 136 Ill. 354 (1891). (The term “necessities” includes items such as food, clothing, lodging and education, but it typically does not include purchases like automobiles, even if used to earn a living.)

A loan agreement does become enforceable against a minor party if the minor, upon reaching the age of majority, ratifies the loan agreement. Illinois law allows a minor to either ratify a contract with an intentional act after reaching the age of majority, or to disaffirm the contract within a reasonable time or within the statute of limitations applicable to the type of loan at issue. Acts which may constitute ratification include making payments on a loan, or causing a loan contract to be recorded. In Illinois, if a minor fails to ratify a loan agreement upon attaining age of majority, the loan may nonetheless be deemed ratified, and thereby rendered enforceable against the minor, if he or she fails to disaffirm the loan agreement within any applicable statute of limitations. Fletcher v. Marshall, 260 Ill.App.3d 673, 675 (2nd Dist. 1994) (citations omitted).

Notably, if a minor co-signed a checking account agreement along with a parent, any overdraft would still be enforceable against the parent, even if it would be voidable with respect to the minor.