What should you do if you receive a payment by check, and the check bounces? Indiana law offers two helpful remedies from which you can choose.

Under Indiana’s banking law, you may be able to recover the following in addition to the original amount of the check:

(1) Interest at the rate of eighteen percent (18%) per annum on the face amount of the check from the date of the check's execution until payment is made in full.

(2) Court costs incurred in prosecuting an action that may be brought by the holder to collect on the check.

(3) Reasonable attorney's fees incurred by the holder if the responsibility for collection is referred to an attorney who is not a salaried employee of the holder. If legal action is filed to effect collection and the collection on the check is referred to an attorney who is not a salaried employee of the holder, the holder of the check is entitled to minimum attorney's fees of not less than one hundred dollars ($100).

(4) Actual travel expenses not otherwise reimbursed under subdivisions (1) through (3) and incurred by the holder to do either of the following:

(A) Have the holder or an employee or agent of the holder file papers and attend court proceedings related to the recovery of a judgment under this chapter.

(B) Provide witnesses to testify in court proceedings related to the recovery of a judgment under this chapter.

(5) A reasonable amount to compensate the holder for time used to do either of the following:

(A) File papers and attend court proceedings related to the recovery of a judgment under this chapter.

(B) Travel to and from activities described in clause (A).

(6) Actual direct and indirect expenses incurred by the holder to compensate employees and agents for time used to do either of the following:

(A) File papers and attend court proceedings related to the recovery of a judgment under this section.

(B) Travel to and from activities described in clause (A).

(7) All other reasonable costs of collection.

See Ind. Code § 26-2-7-5.

In order to win your case, you would have to prove the check writer did either of the following:

(1) Without valid legal cause stops payment on the check.

(2) Allows the check to be dishonored by a financial institution because of any of the following:

(A) Lack of funds.

(B) Failure to have an account.

(C) Lack of an authorized signature of the drawer or a necessary endorser.

See Ind. Code § 26-2-7-4.

The person who wrote the bad check can avoid all of these extra costs if he pays the full amount of the check within 10 days after the holder of the check gives him written notice that the bank has refused to cash the check. See Ind. Code § 26-2-7-8. To give this notice, you only need to send a letter using first class postage to the address shown on the check or to the address the check writer gave you when he gave you the check. See Ind. Code § 26-2-7-3.

If you send written notice by certified mail, and the check writer refuses to pay for more than 30 days, in addition to the remedies listed in Ind. Code § 26-2-7-5, you can recover:

(1) If the face amount of the check is not greater than two hundred fifty dollars ($250), three (3) times the face amount of the check.

(2) If the face amount of the check is greater than two hundred fifty dollars ($250), the face amount of the check plus five hundred dollars ($500).

All of the statutes cited for this choice of remedy can be found at www.in.gov/legislative/ic/code/title26/ar2/ch7.html.

Your second choice is to take advantage of the statute that allows you to recover three times your damages if you are a victim of a crime. This statute states:

If a person suffers a pecuniary loss as a result of a violation of IC 35-43, IC 35-42-3-3, IC 35-42-3-4, or IC 35-45-9, the person may bring a civil action against the person who caused the loss for the following:

(1) An amount not to exceed three (3) times the person's actual damages.

(2) The costs of the action.

(3) A reasonable attorney's fee.

(4) Actual travel expenses that are not otherwise reimbursed under subdivisions (1) through (3) and are incurred by the person suffering loss to:

(A) have the person suffering loss or an employee or agent of that person file papers and attend court proceedings related to the recovery of a judgment under this chapter; or

(B) provide witnesses to testify in court proceedings related to the recovery of a judgment under this chapter.

(5) A reasonable amount to compensate the person suffering loss for time used to:

(A) file papers and attend court proceedings related to the recovery of a judgment under this chapter; or

(B) travel to and from activities described in clause (A).

(6) Actual direct and indirect expenses incurred by the person suffering loss to compensate employees and agents for time used to:

(A) file papers and attend court proceedings related to the recovery of a judgment under this chapter; or

(B) travel to and from activities described in clause (A).

(7) All other reasonable costs of collection.

See Ind. Code § 34-24-3-1, available at http://www.in.gov/legislative/ic/code/title34/ar24/ch3.html.

Under Ind. Code § 35-43-5-5, available at http://www.in.gov/legislative/ic/code/title35/ar43/ch5.html, Check Deception is a crime that would trigger the treble damages statute. That statute sets out what constitutes the crime:

(a) A person who knowingly or intentionally issues or delivers a check, a draft, or an order on a credit institution for the payment of or to acquire money or other property, knowing that it will not be paid or honored by the credit institution upon presentment in the usual course of business, commits check deception, a Class A misdemeanor. However, the offense is a Class D felony if the amount of the check, draft, or order is at least two thousand five hundred dollars ($2,500) and the property acquired by the person was a motor vehicle.

(b) An unpaid and dishonored check, a draft, or an order that has the drawee's refusal to pay and reason printed, stamped, or written on or attached to it constitutes prima facie evidence:

(1) that due presentment of it was made to the drawee for payment and dishonor thereof; and

(2) that it properly was dishonored for the reason stated.

(c) The fact that a person issued or delivered a check, a draft, or an order, payment of which was refused by the drawee, constitutes prima facie evidence that the person knew that it would not be paid or honored. In addition, evidence that a person had insufficient funds in or no account with a drawee credit institution constitutes prima facie evidence that the person knew that the check, draft, or order would not be paid or honored.

(d) The following two (2) items constitute prima facie evidence of the identity of the maker of a check, draft, or order if at the time of its acceptance they are obtained and recorded, either on the check, draft, or order itself or on file, by the payee:

(1) Name and residence, business, or mailing address of the maker.

(2) Motor vehicle operator's license number, Social Security number, home telephone number, or place of employment of the maker.

(e) It is a defense under subsection (a) if a person who:

(1) has an account with a credit institution but does not have sufficient funds in that account; and

(2) issues or delivers a check, a draft, or an order for payment on that credit institution;

pays the payee or holder the amount due, together with protest fees and any service fee or charge, which may not exceed the greater of twenty dollars ($20) or five percent (5%) (but not more than two hundred fifty dollars ($250)) of the amount due, that may be charged by the payee or holder, within ten (10) days after the date of mailing by the payee or holder of notice to the person that the check, draft, or order has not been paid by the credit institution. Notice sent in the manner set forth in IC 26-2-7-3 constitutes notice to the person that the check, draft, or order has not been paid by the credit institution. The payee or holder of a check, draft, or order that has been dishonored incurs no civil or criminal liability for sending notice under this subsection.

(f) A person does not commit a crime under subsection (a) when:

(1) the payee or holder knows that the person has insufficient funds to ensure payment or that the check, draft, or order is postdated; or

(2) insufficiency of funds or credit results from an adjustment to the person's account by the credit institution without notice to the person.

So what should you do if a person bounces a check on you. I believe you will get more options if you send a written demand for payment by certified mail to the address on the check (or the address the person gave you if it is different). If within 10 days you don’t receive payment of the full amount of the check, plus and bank service charges, you would then be able to file a lawsuit using either the banking statute, Ind. Code 26-2-7, or the treble damages statute, Ind. Code § 34-24-3-1. Make your choice based on how well you met the requirements of either statute, and how much money you hope to recover. You have more options if the check is not paid within 30 days of the notice.

If the check is small enough, you may be able to file a lawsuit in small claims court without a lawyer. You may not mind hiring a lawyer, because those statutes allow you to have the other person pay for your lawyer. If you use small claims court, be sure to bring a copy of your statute and remind the judge to award the additional damages.