Non-sufficient Funds - Collection On Bad Cheque

Collection On Bad Cheque

When a bad cheque is negotiated, the recipient of the cheque may choose to take action against the writer. The action that is taken may be civil or criminal, depending on the amount of the cheque and the laws in the jurisdiction where the cheque is written.

In many jurisdictions in the United States, a Bad Check Restitution Program exists that allows recipients of bad cheques to collect the funds from the local district attorney's office, regardless of the amount. An agency run by the district attorney will pursue the writer of the cheque by attempting to collect the funds in exchange for avoiding criminal prosecution. The cheque writer will be responsible to cover the amount of the cheque, plus all fees to which the recipient is legally entitled, plus a program fee. The writer will also be required to take a course designed to improve cheque writing habits. These programs are controversial and in recent years, have come under fire in lawsuits. Normally, if cheque writer can cover up their bad credits in 60 days, all charges will be dropped.

Note that in some places, for a criminal prosecution on a bad check, there must be 'fraud' involved. In some U.S. States, if the check writer informs the party they are uttering the check to that it will not clear at the current time (such as asking someone to 'hold' a check for a few days), if the check bounces, they can still be sued for the value of the check, but warning the recipient before acceptance that the check will not clear immediately negates the element of fraud and prevents criminal prosecution.