diff --git a/activemq-broker/src/main/java/org/apache/activemq/broker/region/Queue.java b/activemq-broker/src/main/java/org/apache/activemq/broker/region/Queue.java
index c6241b0723..62c8c7ae3d 100644
--- a/activemq-broker/src/main/java/org/apache/activemq/broker/region/Queue.java
+++ b/activemq-broker/src/main/java/org/apache/activemq/broker/region/Queue.java
@@ -17,6 +17,7 @@
 package org.apache.activemq.broker.region;
 
 import static org.apache.activemq.broker.region.cursors.AbstractStoreCursor.gotToTheStore;
+import static org.apache.activemq.transaction.Transaction.IN_USE_STATE;
 
 import java.io.IOException;
 import java.util.ArrayList;
@@ -667,9 +668,16 @@ public class Queue extends BaseDestination implements Task, UsageListener, Index
 
                                 try {
                                     // While waiting for space to free up... the
-                                    // message may have expired.
+                                    // transaction may be done
+                                    if (message.isInTransaction()) {
+                                        if (context.getTransaction().getState() > IN_USE_STATE) {
+                                            throw new JMSException("Send transaction completed while waiting for space");
+                                        }
+                                    }
+
+                                    // the message may have expired.
                                     if (message.isExpired()) {
-                                        LOG.error("expired waiting for space..");
+                                        LOG.error("message expired waiting for space");
                                         broker.messageExpired(context, message, null);
                                         destinationStatistics.getExpired().increment();
                                     } else {
diff --git a/activemq-broker/src/main/java/org/apache/activemq/broker/region/cursors/AbstractPendingMessageCursor.java b/activemq-broker/src/main/java/org/apache/activemq/broker/region/cursors/AbstractPendingMessageCursor.java
index 668a338ea6..2c78ae364c 100644
--- a/activemq-broker/src/main/java/org/apache/activemq/broker/region/cursors/AbstractPendingMessageCursor.java
+++ b/activemq-broker/src/main/java/org/apache/activemq/broker/region/cursors/AbstractPendingMessageCursor.java
@@ -174,7 +174,17 @@ public abstract class AbstractPendingMessageCursor implements PendingMessageCurs
     @Override
     public boolean hasSpace() {
         // allow isFull to verify parent usage and otherwise enforce local memoryUsageHighWaterMark
-        return systemUsage != null ? (!isFull() && systemUsage.getMemoryUsage().getPercentUsage() < memoryUsageHighWaterMark) : true;
+        return systemUsage != null ? (!isParentFull() && systemUsage.getMemoryUsage().getPercentUsage() < memoryUsageHighWaterMark) : true;
+    }
+
+    private boolean isParentFull() {
+        boolean result = false;
+        if (systemUsage != null) {
+            if (systemUsage.getMemoryUsage().getParent() != null) {
+                return systemUsage.getMemoryUsage().getParent().getPercentUsage() >= 100;
+            }
+        }
+        return result;
     }
 
     @Override
diff --git a/activemq-unit-tests/src/test/java/org/apache/activemq/bugs/PfcTimeoutTest.java b/activemq-unit-tests/src/test/java/org/apache/activemq/bugs/PfcTimeoutTest.java
new file mode 100644
index 0000000000..23e1a2fd56
--- /dev/null
+++ b/activemq-unit-tests/src/test/java/org/apache/activemq/bugs/PfcTimeoutTest.java
@@ -0,0 +1,274 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one or more
+ * contributor license agreements.  See the NOTICE file distributed with
+ * this work for additional information regarding copyright ownership.
+ * The ASF licenses this file to You under the Apache License, Version 2.0
+ * (the "License"); you may not use this file except in compliance with
+ * the License.  You may obtain a copy of the License at
+ * <p>
+ * http://www.apache.org/licenses/LICENSE-2.0
+ * <p>
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package org.apache.activemq.bugs;
+
+
+import org.apache.activemq.ActiveMQConnection;
+import org.apache.activemq.ActiveMQConnectionFactory;
+import org.apache.activemq.broker.BrokerService;
+import org.apache.activemq.broker.jmx.DestinationView;
+import org.apache.activemq.broker.jmx.QueueView;
+import org.apache.activemq.broker.region.policy.PolicyEntry;
+import org.apache.activemq.broker.region.policy.PolicyMap;
+import org.junit.Test;
+import org.slf4j.Logger;
+import org.slf4j.LoggerFactory;
+
+import javax.jms.Connection;
+import javax.jms.Message;
+import javax.jms.MessageConsumer;
+import javax.jms.MessageProducer;
+import javax.jms.Session;
+import javax.management.ObjectName;
+import java.util.ArrayList;
+import java.util.List;
+import java.util.Map;
+import java.util.concurrent.CountDownLatch;
+import java.util.concurrent.TimeUnit;
+
+import static org.junit.Assert.assertEquals;
+import static org.junit.Assert.assertTrue;
+
+
+public class PfcTimeoutTest {
+
+    private static final Logger LOG = LoggerFactory.getLogger(PfcTimeoutTest.class);
+
+    private static final String TRANSPORT_URL = "tcp://0.0.0.0:0";
+    private static final String DESTINATION = "testQ1";
+
+    protected BrokerService createBroker() throws Exception {
+
+        BrokerService broker = new BrokerService();
+        broker.setDeleteAllMessagesOnStartup(true);
+        broker.setAdvisorySupport(false);
+
+
+        PolicyMap policyMap = new PolicyMap();
+        List<PolicyEntry> entries = new ArrayList<PolicyEntry>();
+        PolicyEntry pe = new PolicyEntry();
+
+        pe.setProducerFlowControl(true);
+        pe.setMemoryLimit(10 * 1024);
+        // needs to be > 100% such that any pending send that is less that 100% and pushed usage over 100% can
+        // still get cached by the cursor and retain the message in memory
+        pe.setCursorMemoryHighWaterMark(140);
+        pe.setExpireMessagesPeriod(0);
+        pe.setQueue(">");
+        entries.add(pe);
+        policyMap.setPolicyEntries(entries);
+        broker.setDestinationPolicy(policyMap);
+
+        broker.addConnector(TRANSPORT_URL);
+
+        broker.start();
+        return broker;
+    }
+
+
+    @Test
+    public void testTransactedSendWithTimeout() throws Exception {
+
+
+        BrokerService broker = createBroker();
+        broker.waitUntilStarted();
+
+        CountDownLatch gotTimeoutException = new CountDownLatch(1);
+
+        try {
+            int sendTimeout = 5000;
+
+            //send 3 messages that will trigger producer flow and the 3rd send
+            // times out after 10 seconds and rollback transaction
+            sendMessages(broker, gotTimeoutException, sendTimeout, 3);
+
+            assertTrue(gotTimeoutException.await(sendTimeout * 2, TimeUnit.MILLISECONDS));
+
+        } finally {
+
+            broker.stop();
+            broker.waitUntilStopped();
+        }
+
+    }
+
+    @Test
+    public void testTransactedSendWithTimeoutRollbackUsage() throws Exception {
+
+
+        BrokerService broker = createBroker();
+        broker.waitUntilStarted();
+
+        CountDownLatch gotTimeoutException = new CountDownLatch(1);
+
+        try {
+
+            int sendTimeout = 5000;
+
+            //send 3 messages that will trigger producer flow and the 3rd send
+            // times out after 10 seconds and rollback transaction
+            int numberOfMessageSent = sendMessages(broker, gotTimeoutException, sendTimeout, 3);
+
+            assertTrue(gotTimeoutException.await(sendTimeout * 2, TimeUnit.MILLISECONDS));
+
+            //empty queue by consuming contents
+            consumeMessages(broker, numberOfMessageSent);
+
+            QueueView queueView = getQueueView(broker, DESTINATION);
+
+            long queueSize = queueView.getQueueSize();
+            long memoryUsage = queueView.getCursorMemoryUsage();
+
+
+            LOG.info("queueSize after test = " + queueSize);
+            LOG.info("memoryUsage after test = " + memoryUsage);
+
+            assertEquals("queue size after test ", 0, queueSize);
+            assertEquals("memory size after test ", 0, memoryUsage);
+
+        } finally {
+
+            broker.stop();
+            broker.waitUntilStopped();
+        }
+    }
+
+    private int sendMessages(final BrokerService broker, final CountDownLatch gotTimeoutException, int sendTimeeOut, int messageCount) throws Exception {
+
+        int numberOfMessageSent = 0;
+
+        ActiveMQConnectionFactory connectionFactory = newConnectionFactory(broker);
+        connectionFactory.setSendTimeout(sendTimeeOut);
+        Connection connection = (ActiveMQConnection) connectionFactory.createConnection();
+        connection.start();
+
+        Session producerSession = connection.createSession(true, Session.SESSION_TRANSACTED);
+
+        try {
+
+
+            MessageProducer jmsProducer = producerSession.createProducer(producerSession.createQueue(DESTINATION));
+
+            Message sendMessage = producerSession.createTextMessage(createTextMessage(5000));
+
+            for (int i = 0; i < messageCount; i++) {
+
+                jmsProducer.send(sendMessage);
+                producerSession.commit();
+                numberOfMessageSent++;
+
+            }
+
+            LOG.info(" Finished after producing : " + numberOfMessageSent);
+            return numberOfMessageSent;
+
+        } catch (Exception ex) {
+
+            LOG.info("Exception received producing ", ex);
+            LOG.info("finishing after exception :" + numberOfMessageSent);
+            LOG.info("rolling back current transaction ");
+
+            gotTimeoutException.countDown();
+            producerSession.rollback();
+
+            return numberOfMessageSent;
+        } finally {
+            if (connection != null) {
+                connection.close();
+            }
+        }
+
+    }
+
+    private String createTextMessage(int size) {
+        StringBuffer buffer = new StringBuffer();
+
+        for (int i = 0; i < size; i++) {
+            buffer.append("9");
+        }
+
+        return buffer.toString();
+    }
+
+
+    private ActiveMQConnectionFactory newConnectionFactory(BrokerService broker) throws Exception {
+        ActiveMQConnectionFactory result = new ActiveMQConnectionFactory("admin", "admin", broker.getTransportConnectorByScheme("tcp").getPublishableConnectString());
+        result.setWatchTopicAdvisories(false);
+        return result;
+    }
+
+    private int consumeMessages(BrokerService broker, int messageCount) throws Exception {
+
+        int numberOfMessageConsumed = 0;
+
+        ActiveMQConnectionFactory connectionFactory = newConnectionFactory(broker);
+        Connection connection = (ActiveMQConnection) connectionFactory.createConnection();
+        connection.start();
+
+        Session consumerSession = connection.createSession(false, Session.AUTO_ACKNOWLEDGE);
+
+        try {
+
+
+            MessageConsumer jmsConsumer = consumerSession.createConsumer(consumerSession.createQueue(DESTINATION));
+
+
+            for (int i = 0; i < messageCount; i++) {
+                jmsConsumer.receive(1000);
+                numberOfMessageConsumed++;
+            }
+
+            LOG.info(" Finished after consuming  : " + numberOfMessageConsumed);
+            return numberOfMessageConsumed;
+
+        } catch (Exception ex) {
+
+            LOG.info("Exception received producing ", ex);
+            LOG.info("finishing after exception :" + numberOfMessageConsumed);
+
+
+            return numberOfMessageConsumed;
+        } finally {
+            if (connection != null) {
+                connection.close();
+            }
+        }
+
+    }
+
+
+    private QueueView getQueueView(BrokerService broker, String queueName) throws Exception {
+        Map<ObjectName, DestinationView> queueViews = broker.getAdminView().getBroker().getQueueViews();
+
+        for (ObjectName key : queueViews.keySet()) {
+            DestinationView destinationView = queueViews.get(key);
+
+            if (destinationView instanceof QueueView) {
+                QueueView queueView = (QueueView) destinationView;
+
+                if (queueView.getName().equals(queueName)) {
+                    return queueView;
+                }
+
+            }
+        }
+        return null;
+    }
+
+}
+