Skip to main content

I loaned someone 10,000.00 for 90 days. they sent a check, then told me there were no funds in the bank. The check was no good

Westfield, MA |

It was a personal loan to a small company for advertising. I have a notarized loan agreement. Should I take the check to the bank? How can I prove it's a bad check if I don't? What steps can I take to collect? I am in Massachusetts the company is in Florida. Please help me.

Attorney Answers 4

Posted

You should certainly try to cash the check, if the bank refuses to cash the check, then the company, in admitting that there were not funds in the bank, can be guilty of check fraud. Once this happens you can go to the police and file a report, you can also sue the company for breach of the agreement. You should speak to an attorney as soon as possible. Because the company is located in FL and you are in MA, you should speak to attorney who will be able to answer any jurisdiction questions that may arise. Please feel free to email me for a free consultation if you would like.

Regards,

Kati M. Amarantes
kati@asclawyers.com

Mark as helpful

3 lawyers agree

Posted

Hi there,

My colleague Kati is absolutely correct regarding the issue of check fraud and a potential suit. However, if your debtor is unable to pay your bill, it's unlikely defending criminal charges would help their financial situation. You also can't use the threat of criminal charges against a party as leverage in a civil matter.

How you would collect on the debt would likely be governed by your loan agreement, assuming you used a good one. If you had it drafted by an attorney you probably have excellent protection. That would determine what might happen with interest rates, late fees, governing jurisdiction, collection cost responsibility, attorney's fees, when you can sue, etc. Of particular importance is if you have any recourse against the individuals behind the business, or only the business entity (personal liability).

You should have your loan agreement reviewed by an attorney and have the attorney take the appropriate collection actions. A good attorney in this case may be able to "encourage" the other party to immediately make good on their debt, highlighting the futility of disputing the case, saving you a great deal of trouble and expense. Any further legal dispute would likely only cost both parties more time and money, making things worse. However, at some point court action may be the best option. Your attorney would be able to consult you further.

Take action quickly - the longer a debtor is in default, the less likely a successful collection becomes.

If you would like to discuss your matter further over a free and confidential phone consult, please contact me at your convenience.

Regards,

Michael J. Duffy
Duffy Law, LLC

1-888-414-5773
www.mduffylaw.com

mduffy@mduffylaw.com

Please note: The information provided here is for general informational purposes only and should not be construed as legal advice or legal opinion on specific facts or circumstances. You should consult an experienced attorney concerning your particular factual situation and any specific legal questions you may have. No attorney-client relationship is created merely through the exchange of information via this web site. Michael J. Duffy will not undertake representation of a client without the client first signing a written retainer and representation agreement.

Mark as helpful

1 lawyer agrees

Posted

To determine which state has jurisdiction over this matter, it will be important for your attorney to know details such as where the transaction occurred and how you were in contact with the company. If the check is drawn on a bank in MA, you should present it for payment. It is possible that you are being deceived about the viability of the check, in the hope that you won't try to cash it. In MA, if most of the business took place here and if the check is drawn on a bank here, you can attempt to have criminal charges brought against the person who signed the check, and have the DA's office attempt to get restitution for your loss. By doing so, you don't have to incur the expense of hiring a civil lawyer. If the police are not willing to charge the person with a crime, you may need to hire a civil lawyer who handles contract issues. Again, it will be important to know what state has jurisdiction to figure out where you need a lawyer.

Mark as helpful

1 lawyer agrees

Posted

I mostly agree with the first answer. If the FLA company paid you with a check it knew was not backed by adequate funds in the account, then it's a crime. Unfortunately, the police dont often like to pursue these types of matters because they feel they're more 'civil' in nature. So you could get some push back from the police even if you report it. Nonetheless, you should attempt to cash the check to prove the funds were not available, but keep copies of the check and any other documents. If you still can't get the money from the FLA company, my suggestion would be file suit in FLA. With only $10K on the line, you may have trouble finding an attorney to pursue the case on contingency--so you may need to pay a retainer and/or hourly fee. You could sue in MA, but even if you obtain a judgment against the FLA company in MA, you'll be stuck having to go down to FLA to enforce the judgment anyway. Plus, a good tactic in these types of cases is to attach assets early on in the litigation. You would have a much easier time initiating the attachment process in FLA where the Company's assets are to begin with. Good luck.

This response is not to be considered legal advice by anyone. This communication, alone, does not create an attorney-client privilege. Unless you have executed a fee agreement with the attorney, that is related to the subject matter contained in this communication, you are advised not to rely on this communication to make any decisions whatsoever or to create an attorney-client relationship. No attorney-client relationship shall exist with this attorney without a fee agreement executed by you and the attorney.

Mark as helpful

1 lawyer agrees

Litigation topics

Top tips from attorneys

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics