What To Do When Someone Gives you a Bounced Check

Did someone write you a check that bounced? Or, did someone write you a check and then stop payment on it in bad faith? 

When someone owes you money and pays you with a bad check, you are put in the difficult situation of figuring out how to get your money.   

In this article, we will review your options for dealing with a bounced check, including:

• Sending a demand letter, 

• Suing in small claims court, and 

• Pursuing criminal charges against the person who wrote the bad check.

Before bringing any legal action for the bad check, it may be most effective to first reach out directly to the person who gave you the bad check. Regardless of whether your relationship with them is personal or professional, it makes sense to first call, text, or email them to ask what’s going on. Remind them that they owe you the money and try to find out why they wrote you a bad check and whether they can make it right. Explain that you trusted them to pay you the money they owed, and try to convince them to pay you quickly.  

If you have a personal relationship with the person who wrote you the bad check, you can tell them what you need to use the money for, especially if you have immediate expenses to pay, and maybe they will be more empathetic with what you are going through. If you are a business owner, and it is very important to your business that you get repaid promptly, try to explain the urgency for you and your other customers.  If they can empathize with you, they may understand why you need to get paid back quickly.  

During your communications, you could offer them the option of repaying you through a payment plan if paying you in one lump sum is too difficult for them (and if you are okay with not getting the full amount you are owed immediately). You could also ask them to brainstorm ways to pay you back the money they owe. If they have a creative solution for repaying you the money, and it is their idea, they are more likely to follow through on a repayment solution.    

If your informal communication efforts don’t succeed, the next step may be to send the person a formal bad check demand letter that requests payment for the money owed. 

A formal letter to someone who owes you money has the following benefits:

• They take you more seriously with a letter. A letter tends to show you are serious about getting your money back and that you are putting things in writing before escalating the issue. 

• Sending a letter is a low-cost, low-effort way to get your money back. The person who owes you money may decide to pay you without you having to take further action and spend more money.  

• It may clarify a situation that arose out of miscommunication. Writing out what happened and why you are requesting to get paid back may clarify what happened to the other party. 

• Some small claims courts require you to send a demand letter before suing. 

While you can verbally request your money back, it is a good idea to send your request in the form of a demand letter so that it is in writing and in a format that you can show to a judge later on if necessary.  

Unsure of what to include in your demand letter? Here are a few suggestions: 

• How much money you are owed, and why you are owed this money.

• When you lent them the money (or sold them something).  

• Your contact information.

• Your preferred method(s) to receive the repayment.

• Option to pay using a payment plan.

• Date for repayment (usually about 14 days) and a warning that you intend to sue if you don’t get your money by the repayment date. 

You can sue the person who wrote you the bad check in small claims court as the amount you want to sue them for is within the small claims limit of your local small claims court (review our guide on small claims limits in all 50 states). 

Continue Learning: Guide on How to Sue in Small Claims Court

How Much to Sue For

While you can always sue for the amount the bad check was for, you may be able to sue for more as some states have laws that will penalize the person who wrote the bad check. 

Here are some examples:

Arizona: Arizona Revised Statutes Section 12-671       

Civil Liability: A person who, with intent to defraud, gives a check, knowing at the time that they do not have an account or sufficient funds to pay the check in full, is civilly liable to you.  

Notice Requirement: To establish liability, you must give the check writer notice of nonpayment and afford them 12 days to pay the check.  You can give the notice of nonpayment to the check writer in person or in writing.  

Damages: If the check is not paid within 12 days, the check writer will owe you an amount equal to double the amount of the check or $50, whichever is greater, together with costs and reasonable attorney’s fees.  

California: California Civil Code Section 1719

Damages: You can recover the amount of the bad check, plus a service charge (up to $25 for one bad check and $35 for subsequent checks).  In addition, if you make a written demand for payment by certified mail and the check writer doesn’t pay you the amount of the check (plus the service charge) within 30 days, you can sue for the amount of the bad check, plus damages of three times the amount of the check (called “treble damages”). The minimum amount of damages you can sue for is $100, and the maximum amount is $1,500. Note that if the check writer made any partial payments, this amount will be deducted from the damages awarded.  

Evidence: Finally, to obtain any damages, you must also be prepared to show evidence that there is no good faith dispute about whether you are owed the money. A good faith dispute is where the court finds that the check writer had a reasonable belief that they were entitled to withhold payment. For example, if someone stopped payment on a check because they reasonably believed that they no longer owed you the money, then you may not be able to collect these extra damages.  

New York: New York General Obligations Law, Section 11-104 

Civil Liability: The check writer who knows or should know that payment of the check will be refused will owe damages for the amount of the check, and also for additional (liquidated) damages.  

Damages: The total amount of additional damages owed will depend on the reason for the bad check: 

• If no bank account exists, damages will be twice the face amount of the check or $750, whichever is less. 

• If there are insufficient funds in the account, damages will be twice the face amount of the check or $400, whichever is less.  

Note that the law provides some exceptions for situations where the additional damages will not be owed, including where the check was for rent, utilities, or for a debt.  

Finally, if you have a business, the additional damages will only be available if conspicuous notice was posted at the time of sale.  

Demand Requirement: You are required to make two written demands for payment, and the check writer will owe damages if they fail to pay the face amount of the check within 30 days after the date that you mail the second written demand for payment. The law has very specific requirements for how to write and send the demand letters. The first letter should be sent on or after the date you received notice that the check bounced. The second letter should be sent on or after the 15th day following the date of receipt of the first letter.

Many states have laws that allow for criminal liability for writing a bad check. Contact your local prosecutor to find out if they can bring criminal charges for the bounced check. However, if you contact your local prosecutor and describe the bad check situation, there is still a chance that they may decline to bring criminal charges against the bad check writer. If the amount of your bad check is small, or if there are questions about whether the bad check writer actually knowingly issued the bad check, they may not want to prosecute. Nevertheless, you can still sue the bad check writing in civil court to obtain the money owed to you. 

Below, we have outlined the laws in Arizona, California, New York, and Texas: 

Arizona: A.R.S. 13-1807; 13-1808

The Law: It is a crime to write a check if the check writer knows that they do not have sufficient funds to pay the check in full. 

The Evidence: The check writer’s knowledge of insufficient funds may be presumed if any of the following are true: 

• They had no account or a closed account with the bank when they issued the check; or 

• If payment was refused by the bank for lack of funds within 30 days after issue and they failed to pay the full amount due on the check, together with reasonable costs, within 12 days after receiving notice of that refusal. 

The Check Writer’s Defenses: Any of the following may be defenses that the check writer can rely upon: 

• You knew (or had reason to believe) before drawing the check, that they did not have sufficient funds to ensure payment. 

• The check is post dated and sufficient funds are on deposit on the later date for full payment of the check.

• They had Insufficient funds because the bank adjusted their account, but failed to give them notice of that adjustment.    

The Penalty: Depending on the amount of the check, writing a bad check can be a misdemeanor or a felony. 

• Misdemeanor: For a bad check conviction, the sentence can include up to 6 months in jail and fines up to $2,500. The judge can also send the check writer to jail for up to 6 months for each bad check and order them to pay full restitution for the check.

• Felony: A bad check in the amount of $5,000 or more is a felony if the check writer fails to pay the full amount of the check, including accrued interest at the rate of 12% per year and any other applicable fees, within 60 days after receiving notice that the check bounced. The penalty for a felony conviction varies depending on the amount of the check and the check writer’s history, but can include fines, fees, restitution, and jail time.    

California: Penal Code 476A

The Law: It is a crime to willfully, with the intent to defraud, write or use a bad check, when the check writer knows that there are insufficient funds in the account. 

The Evidence: The primary factor in proving a case is that the check writer had knowledge that the bank account didn’t have the funds to cover the full amount of the check when it was presented. In other words, the law penalizes criminal intent, and not an actual outcome.   

The Penalty: Depending on the amount of the check, writing a bad check can be a misdemeanor or a felony. 

• Misdemeanor: The offense is a misdemeanor if the bad check totals $950 or less, and the check writer does not have prior convictions for writing bad checks or any other forgery/counterfeit offense. The maximum sentence is a year in jail and a $1,000 fine.  

• Felony: The offense can be charged as a felony if the value of the bad check is more than $950. If convicted of a felony, the check writer will face up to three years in jail and a $10,000 fine, and will have to pay full restitution.  

New York: Penal Law 190.05; 190.10; 190.15

The Law: It is a crime to write a check if the check writer presents it knowing that they do not have sufficient funds in an account to cover it (or no account at all) and knowing that payment will be refused, and then resulting in the bank’s refusal of payment.   

The Evidence: The check writer’s knowledge of insufficient funds may be presumed when: 

• They have no account with the bank at the time of writing the check. 

• They have insufficient funds with the bank at the time of presenting the check, the check is presented to the bank for payment no more than 30 days after it is written, and the bank has insufficient funds when it is presented.  

Defenses: The following are defenses that the check writer may rely upon: 

• They made full satisfaction of the amount of the check within 10 days after dishonor by the bank.

• They acted as a representative or as an employee who, without personal benefit, merely executed the orders of their supervisor.   

The Penalty: Writing a bad check can be a misdemeanor and the sentence for violating this law can include imprisonment for up to three months and a fine of up to $500.  The court may also order restitution, which will require the check writer to pay the amount of the bad check, plus any associated fees and costs.      

Texas: Tex. Penal Code Ann. Section 32.41

The Law: The law prohibits a person from writing a check knowing that the account does not have sufficient funds to cover the payment.  

The Evidence: The prosecutor must prove that the person who presented the check knew that the funds in the account were not sufficient.  The check writer’s knowledge of insufficient funds may be presumed if any of the following are true: 

• They had no account with the bank when they issued the check. 

• Payment was refused by the bank for insufficient funds or lack of funds within 30 days after the check was issued, and then they failed to pay the check holder in full within 10 days after receiving notice of the bank’s refusal.  

Defense: If the check is post dated, the check writer may defeat the presumption that they had knowledge of insufficient funds.  

The Penalty: Regardless of the amount of the check, writing a bad check is a misdemeanor, with a maximum possible fine of up to $500. However, if the bad check passed is for child support, the penalty is a fine of up to $2,000, and jail time of up to 180 days.

After considering all of your options for how to get your money back, you will likely realize that sending a demand letter to the person who gave you a bounced check is going to be an effective strategy. Putting your demand in writing will let the person know that you are serious about collecting your money.  Also, because sending a demand letter may be a required first step for filing in small claims court, you will be in a good position to file your bad check claim if necessary.

Also, now that you have learned about the proof required for criminal and civil claims against a bad check writer, you can consider what kind of evidence you have to prove that the person KNEW they were writing a bad check.  Evidence of the check writer’s knowledge and intent can be very helpful to include in the demand letter, and can help you convince the bad check writer that you will ultimately win a lawsuit against them.