A method of handling a stuck bit in a directory of a cache memory, by defining multiple binary encodings to indicate a defective cache state, detecting an error in a tag stored in a member of the directory (wherein the tag at least includes an address field, a state field and an error-correction field), determining that the error is associated with a stuck bit of the directory member, and writing new state information to the directory member which is selected from one of the binary encodings based on a field location of the stuck bit within the directory member. The multiple binary encodings may include a first binary encoding when the stuck bit is in the address field, a second binary encoding when the stuck bit is in the state field, and a third binary encoding when the stuck bit is in the error-correction field. The new state information may also further be selected based on the value of the stuck bit, e.g., a state bit corresponding to the stuck bit is assigned a bit value from the new state information which matches the value of the stuck bit.