Writing Bad Checks? Learn About NSF Check Laws
Writing Bad Checks? Learn About NSF Check Laws
What are bad checks?
Bad checks are checks that are rejected due to lack of funds or other reasons upon presentation. There are several reasons why a check can be rejected, but most of the time people refer to bad checks as the ones written for an amount that is more than the amount present in the account. A check written for a closed account is also a bad check. Giving a stop payment for a check after getting the services for which the check was issued is also a type of bad check.
Consequences and penalties for writing bad checks
Writing bad checks can put you in a really difficult financial situation. We’re not talking about the isolated incident where you made a mistake and happened to give out a check for more money than you had in your bank account. That’s a mere mishap and it can happen to anyone. Usually, in this situation, quick action on your part will quickly restore your account to its initial good standing. You will have to cover the overdraft amount plus any fees and daily charges from your bank, in order to help you avoid additional overdrafts and fees.
What we’re referring to is people who consistently write bad checks, knowing full well that their account balances can’t possibly cover them. This amounts to asking for trouble with the banks and the businesses you’ve handed those checks to. First of all, if the bank pays the checks, you’ll have to pay an overdraft fee (usually in the $30 range) for every single one of those checks. If your bank returns your check without paying it, you may be charged a “bounced-check,” or “non-sufficient funds,” fee. And the person or company that you wrote the check to–for example, a store, your landlord, or the phone company–may charge you a “returned-check” fee in addition to the fee your bank charges you.
While none of these scenarios are good, it can actually get worse. If your bad checks pile up, your bank will most likely decide that you’re not the type of customer that it wants to do business with, and might decide to close your account completely. This goes hand in hand with reporting your bad check incidents to ChexSystems, which will let other banks know that you’re a repeat offender when it comes to writing bad checks. As a result, the vast majority of banks will refuse to do business with you and you’ll have to look for banks that don’t use ChexSystems in order to be able to open what’s referred to as a fresh start checking account.
You might get even further into trouble if the businesses that you gave the bad checks to decide to take legal action to retrieve the money that you owe them. To do so, they may hire companies that specialize in bad check collections. Of course, you know that as soon as you have debt that was sent into collection, your credit is negatively affected. Even if you manage to pay off the debt, you still have to repair your credit to get it back to what it was before.
In short, the recommendation is to avoid writing bad checks. Sure, mistakes do happen, but the consequences of writing a few bad checks can stay with you for a long time. If an accident does happen, work with the bank or credit union as quickly as you can to avoid it from escalating. This way, you’ll keep your financial situation and your reputation in good standing.
NSF Check Laws
The issuance of a NSF or bad checks is an unlawful act and can attract civil and criminal penalties. The onus of a bad check is assigned to the person signing the check and such a person, upon incrimination, is likely to face legal action as specified by the judicial system of the state. An NSF check leads to the disruption of a healthy business cycle and also attracts bad check/NSF fees for the issuer of the check. The credit worthiness of the issuer is put under scrutiny, which may blemish the business reputation of the issuer.
There are both civil and criminal penalties for this unlawful act, although it is much more costly and difficult to prove a criminal case. When people or businesses have to make the decision, they consider what their primary goal is. Is it to recover the money or to punish the check writer? This is what dictates what course of action to take.
It might also be useful to know that although the guilty party of a fraudulent check is usually the person who signed the check, it could also be the person who fraudulently passed it on, or even a third party who endorsed and passed the check on to another.
| State | Civil Penalty | Criminal Penalty |
| Alabama | Greater of $10 or actual bank charges. | Check of $500 or more, fine of not less than $500 nor more than $5,000 or imprisonment up to 3 years, or both; under $500 check, fine depends on amount and offense. Court shall also order restitution to plaintiff; defendant shall pay court costs if convicted. |
| Alaska | The bidder may recover damages in an amount equal to $100 or treble the amount, whichever is greater, except that damages recovered under bad check law may not exceed the amount of the check by more than $1,000. | Issuing check for $25,000 or more, maximum fine of $50,000, imprisonment up to 10 years, or both, Issuing check for $500 or more, up to $25,000, maximum fine of $50,000, imprisonment up to 5 years, or both. Issuing check for $50 or more, up to $500, maximum of $5000, imprisonment up to one year, or both. Issuing check under $50, maximum fine of $1,000, imprisonment up to 90 days, or both. |
| Arizona | Twice the amount of the check or $50, whichever is greater, costs of suit, reasonable attorneys’ fees. | Up to six months in jail or up to $300 or both if under $25; up to five years in state prison or up to one year in county jail or up to $500 fine or both if between $25 and $100; up to five years in state prison if over $100 or if no account. |
| Arkansas | Amount due, service charge not to exceed $10. On stop payment, 15 days following written demand to drawer’s last known address, holder may collect fee not to exceed $15; failure to make restitution and pay collection fee will result in liability of twice the amount of check but in no event less than $50. | Checks of $200 or less for 1st conviction fine of not less than $50 nor more than $500 or imprisonment up to 30 days or both; 2nd offense fine of not less than $100 nor more than $1,000 or imprisonment up to 90 days or both; 3rd and subsequent offenses fine of not less than $200 nor more than $2,000 or imprisonment up to one year or both.When more than one check is involved and such checks were drawn within 90 days of each other and each is an amount less than $200, the amount of such separate checks may be added together to arrive at and be punishable under the $200 or more amount to which this category refers.
Checks for $500 involve a fine not exceeding $10,000 or imprisonment up to 10 years or both. |
| California | Amount due, damages of treble the amount so owing, but in no case less than $100 or more than $1,500. [Civil Code ยง 1719(a)(2) ] | Where amount is less than $200 and is first offense, up to one year in county jail. |
| Colorado | Treble the amount of such check and in no case less than $100, including reasonable fees. | Misdemeanor – imprisonment in county jail for not less than three months nor more than 12 months or by fine of not less than $250 nor more than $1,000 or both.Felony – imprisonment in state penitentiary for not less than one year nor more than 5 years or by fine of not less than $1,000 nor more than $15,000 or both. If twice previously convicted, punishment is imprisonment in state penitentiary for not less than one year and not more than 10 years or fine of not less than $2,000 nor more than $30,000 or both. |
| Connecticut | Amount of check plus lessor of: if no bank account – $750 or amount of check; or if insufficient funds – $400 or amount of check.Statutory form of notice must be sent at least two times. Statute does not apply to certain consumer services. | Up to $1,000 fine or one year in jail or both. |
| Delaware | Amount due, costs of suit, protest fees. | Misdemeanor – up to 2 years in jail, $1,000 fine, or both. Person who issued check must make restitution to person to whom check was issued. Felony – up to seven years and such fine as court may order. |
| District of Columbia | Amount due, protest fees. | Up to three years imprisonment and $3,000 fine or both. |
| Florida | In event of failure to make payment within 30 days after demand, treble amount owed in addition to the amount owed together with bank and court costs and reasonable attorneys’ fees, not less than $50 and no more than $2,500.If payment is made in 30 days, a service charge of $10 or 5% of face amount of check, whichever is greater, can be added.
In stop payment action, reimbursement for actual travel expenses to holder or agent for filing papers, and for traveling and providing witnesses to an from proceeding. |
Felony – up to 5 years in prison or $1,000 fine.Misdemeanor – up to $300 or six months in jail. |
| Georgia | Upon 30 days following certified written demand by payee to maker, the maker shall be liable to the payee for damages of double the amount owing on the check not to exceed $500 and service charge not to exceed $15. | Check for less than $100, fine of not more than $500 or imprisonment not to exceed 12 months or both. check for $100 or more but less than $300, fine of not more than $1,000 or imprisonment not to exceed 12 months or both. Upon conviction defendant required to make restitution of the amount of the check together with all costs, which are presumed to be $20.When more than one check is involved and such checks were drawn within 90 days of one another and each is in an amount less than $100, the amounts of such separate checks may be added together to arrive at and be punishable as above.
Check for $500 or more; a fine of not less than $500 nor more than $5,000 or by imprisonment for up to three years, or both. |
| Hawaii | Amount due, costs of suit, protest fees. | Up to one year in jail or $1,000 fine or both. |
| Idaho | $100 or treble the amount of the check, whichever is greater, but not more than $500 greater than the amount of the check. | Fine or imprisonment or both as follows:If under $50, 1st offense – $300 and six months;
2nd offense – $1000 and one year; 3rd offense, or if amount in excess of $50 – $5,000 and three years. |
| Illinois | Treble amount of check but not less than $100 nor more than $500 plus attorney’s fees and court costs. | Up to $500 fine or up to one year in jail, or both. |
| Indiana | Treble amount of check not to exceed $500 plus amount of check, attorneys’ fees of not less than $100 and interest at 18% per annum. | Up to $5,000 fine or up to one year in jail, or both. |
| Iowa | Treble amount of dishonored check but not to exceed amount of check plus $500. | Up to $100 fine or 30 days in jail for misdemeanor.Up to seven years in penitentiary, or one year in jail or up to $500 fine, or both, for felony. |
| Kansas | Giver of worthless check is liable for the amount of the check plus an amount equal to the greater of the following: (a) treble the amount of the check, but not exceeding the amount of the check by more than $500; or (b) $100. | Up to $2,500 fine or up to one year in jail or both.Up to $5,000 fine or one to five years in jail or both. |
| Kentucky | Up to $500 fine. One year in penitentiary for a misdemeanor.Felony punishable by imprisonment from one to five years and a fine of not more than $10,000, or double the offender’s gain from commission of the crime, whichever is greater. | |
| Louisiana | Drawer of dishonored check who fails to pay 30 days after written demand delivered by certified or registered mail is liable for damages in twice the amount owing but not less than $100 plus attorneys’s fees and court costs. Payee may charge service charge not to exceed $15 or 5% of the face amount of the check, whichever is greater. District Attorney can collect fees for issuance of worthless check, depending on amount of check. | Check for under $100, imprisonment for not more than 6 months or fine of not more than $500 or both. A third or more such conviction, fine of not more than $1,000 or imprisonment for not more than 2 years or both.Check for $100 or more and less than $500, imprisonment for not more than 2 years or fine of not more than $2,000 or both.
Check for $500 or more, imprisonment for not more than 10 years or fine of not more than $3,000 or both. In addition, the court may order as part of the sentence restitution of the amount of the bad check plus reasonable attorneys fees. |
| Maine | Amount due, court costs, service costs, collection costs, processing charges can be recovered only if statutory notice given, or payment within 10 days of notice. | Up to $1,000 fine or 11 months in jail, or both. |
| Maryland | Amount due, $15 fee, and amount up to two times the amount of the check, but not more than $1,000. Holder may claim damages 30 days after mailing notice of dishonor to last known address of maker or drawer. | Misdemeanor – maximum fine $100 or imprisonment up to 60 days or both.Felony – maximum fine of $1,000, imprisonment up to 15 years, or both. |
| Massachusetts | Amount due, costs of suit, protest fees. | Up to $300 fine or one year in jail. Up to $600 fine and up to 2 years in jail or up to 5 years in penitentiary. |
| Michigan | Up to $250 fine or six months in jail. Up to $500 fine or one year in jail. | |
| Minnesota | Amount due, $100 penalty, interest (at judgment rate), reasonable attorneys’ fees if amount of check over $1,250, $15 service charge. | |
| Mississippi | Amount due plus additional damages of 100% on checks up to $25,000, 50% (not to exceed $50 or fall below $25) on checks on $25 to $200, and 25% on checks over $200. | Checks under $100 – a fine of not less than $25 nor more than $500 or imprisonment in the county jail for not less than five days nor more than six months or both.Upon conviction of second offense for check less than $100 a fine of not less than $50 nor more than $1,000 or imprisonment of not less than 30 days nor more than one year.
For the third offense a felony regardless of amount involved, imprisonment in the state penitentiary for a term of not less than one year nor more than five years. For a check of more than $100, deemed a felony, punishment of fine of not less than $100 nor more than $1,000 or by imprisonment for a term of not more than three years or both. |
| Missouri | Greater of treble face amount owed or $100. Damages should not exceed $500. | Up to $500 fine or six months in jail or both. Up to $1,000 fine or one year in jail or both. In addition prosecutor can collect fee of $5 for checks less than $10, $10 for checks – $10 – $100 and $25 for check of $100 or more. |
| Montana | Service charge plus the greater of $100.00, or three times the amount of the check, but not to exceeed the value of the check by more than $500.00. (MCA 27-1-717.) | Check amount under $500.00=Up to $500 fine or six months in jail, or both.Check amount over $500.00=Up to $50,000 fine or 10 years in penitentiary or both. (MCA 45-6-316.) |
| Nebraska | Amount due, costs, protest fees. | Obtaining property worth: More than $1,000 – Class III felony.More than $300 but less than $1,000 – class IV felony.
Less than $75 – class II misdemeanor; 2nd offense – class IV felony. Issuing or passing a check of any amount – class II misdemeanor. |
| Nevada | Amount due, protest fees treble amount of check but not less than $100 nor more than $500. | Up to six months in county jail or $500 fine, or both. State prison of one to 10 years or $10,000 fine or both. |
| New Hampshire | Amount due, interest, court costs, reasonable costs of collection, and $10 per day (maximum is $50).If check issued to city or town, amount due, $15 fee plus protest, bank, and legal fees; if issued to state agency, amount due, $5 fee plus protest and bank fees. | Up to $200 fine or up to one year in jail, or both. |
| New Jersey | Face amount of the check, attorney fees, court costs, costs of mailing a demand for payment, and damages in an amount equal to $100.00 or triple the amount of the check, whichever is greater, but not to exceed $500.00. | Up to $1,000 fine or up to one year in jail or both. |
| New Mexico | Amount due, costs of suit, protest fees. | Up to $1,000 fine or 30 days in jail, or both. One to 3 years in jail, or up to $1,000, or both. |
| New York | Face value of check, plus two times amount of check up to $750. | Up to three months in jail, or up to $500, or up to double the amount of the drawer’s gain from the commission of the offense. |
| North Carolina | Thirty days after written demand, lesser of $500 or treble amount owing on check, but not less than $100. | $50 – $500 or up to six months in jail.If check is less than $50 – $50 fine or up to 30 days in jail. Over three convictions, up to one year.
If check drawn on non-existent account, fine not to exceed $1,000 or imprisonment for not more than 2 years or both. If check drawn on account closed by drawer prior to time check drawn, fine not to exceed $400 or imprisonment for not more than 5 months or both. |
| North Dakota | Amount due, collection fees not to exceed $10, and $100 or treble amount of check, whichever is less. | $25 – $250 fine, or up to 3 months in county jail, or both. If no account – fine up to $500 and one year in jail. |
| Ohio | The greater of $200 or three times the amount of check and attorney fees (no maximum). | Misdemeanor: Up to 6 months in jail, $1,000 fine, or both.Felony: Up to 5 years, $2,500 fine, or both. |
| Oklahoma | Up to one year imprisonment or up to $1,000 fine or both. One to 10 years imprisonment or up to $5,000 fine. | |
| Oregon | When maker fails to tender amount due after written demand made by payee, payee may recover damages in an amount equal to $100 or treble amount of the amount for which the check, draft or order is drawn, whichever is greater, provided the amount is not greater than $500 over the due amount. | Misdemeanor: Up to $1,000 fine or up to one year in jail, or both.Felony: Imprisonment for not more than 5 years. |
| Pennsylvania | Upon written demand from payee following conviction for passing a bad check and failure to make restitution, the payee upon obtaining civil judgment is entitled to an amount equal to $100 or treble the amount for which the check is drawn, whichever is greater, not to exceed by more than $500 the value of the check. | Up to $1,000 fine or up to 2 years in penitentiary, or both. |
| Rhode Island | Amount of check plus fee of $25, plus amount up to treble amount of check but not less than $200 or more than $1,000. | Up to $500 fine, or up to one year imprisonment, or both. Up to $2,000 fine, or up to 2 years imprisonment, or both. |
| South Carolina | In addition to other fines, issuer shall pay all reasonable court costs, not to exceed $20 and if payment not made within 30 days, issuer shall pay amount of check and damages, of the lesser of $500 or treble the amount of the check. | Up to $2,000 fine or up to 10 years in jail, or both.In magistrate’s court – first conviction, not less than $50, nor more than $250 or imprisonment of 30 days; second or subsequent conviction, fine of $200 or imprisonment for 30 days.
Conviction in court of General Sessions, first conviction fine not less than $300 nor more than $2,000 or by imprisonment for not more than 2 years or both; for second or more conviction, fine of not less than $500 or more than $2,000 or imprisonment for not less than 30 days or not more than 10 years. |
| South Dakota | First offense: a fine of not more than $100 or imprisonment for not more than 30 days or both.Second offense: a fine of not more than $300 nor less than $100 and imprisonment of not more than 6 months or less than 30 days.
Third and subsequent offenses: a fine of not more than $500 nor less than $300 and imprisonment for not more than one year nor less than 6 months. Felony: Up to 3 years and not more than $1,000 fine. |
|
| Tennessee | Treble amount of check, but not to exceed $500. | Not over $100 – not over 11 months 29 days in jail, not over $500 fine, or both.Over $100 – from three to 10 years in jail. |
| Texas | Up to 2 years in county jail or up to $1,000 or both. 30 days to 2 years in jail and up to $1,000. Two to 10 years. Holder of bad check may charge obligor with any additional processing fees. | |
| Utah | Amount due, interest and costs of collection, court costs, reasonable attorneys’ fees. | Less than $200 – up to 6 months or $299 or both;more than $200 but less than $300 – up to one year or $1,000 or both;
more than $300 but less than $1,000 – up to five years or $5,000 or both; more than $1,000 – up to 15 years or $1,000 or both. |
| Vermont | Court costs, amount of check, attorneys’ fees, damage in amount of $50. | Up to one year in jail and $1,000 fine or both. |
| Virginia | Lesser of $100 or three times amount of check. | $200 or less fine or 10 days to 12 months in jail, or both. One to five years in the penitentiary or fine and jail, or one to ten years penitentiary in discretion of court. |
| Washington | Lesser of amount of check or interest at 12%, and cost of collection not to exceed $40. If court action necessary after 15 days, lesser of reasonable attorneys’ fees and treble face of check or $100. | Misdemeanor – full restitution; the defendant need not be imprisoned, but the court shall impose a minimum fine of $500. Of the fine imposed, at least $50 shall not be suspended or deferred. Upon conviction for a second offense within any twelve-month period, the court may suspend or defer only that portion of the fine which is in excess of $500.Felony – Up to one year in jail or up to $1,000 fine, or both. |
| West Virginia | Amount due, service charge not to exceed $10. | Maximum fine of $100, up to 10 days in jail, or both. For obtaining property under $200 – maximum fine of $200, imprisonment up to six months, or both. For obtaining property over $200 – maximum fine of $500, imprisonment from one to five years, or both. |
| Wisconsin | Amount of check plus actual damages and exemplary damages not to exceed treble face amount of check. | Up to $1,000 fine or one year in jail. |
| Wyoming | Amount due as well as damages equal to the cost of collection plus reasonable attorneys’ fees. | Misdemeanor – Fine of not more than $750 or imprisonment for not more than six months, or both.Felony – Fine of not more than $10,000 or imprisonment for a maximum of 10 years, or both. |
Good to know: The bad check law may not apply if your check bounced because your paycheck did not clear or your bank made an error. In addition, if you stop payment on a check because goods you bought are defective, the bad check law is inapplicable.
Leave a Reply