2 Big Reasons to Avoid Writing Worthless or Bad Checks
Reason #1: Civil LiabilityIf you have written a check on behalf of yourself or a corporation that has later bounced or been returned for insufficient funds, you may be subject to civil liability. The assumption would be that you would only be liable for the amount of the bad check. However, this is generally not true. In North Carolina, for example, there is a civil statute that governs the penalties for writing a bad check. These penalties can include attorney fees, costs of litigation, liquidated damages, and the amount of the check. That is why it is important to always keep a close eye on your bank account and to make sure that each check you write is a valid one. If you or someone you know has written a bad check, make it a top priority to refund every dollar of that check to the person or company that tried cashing it.
Reason #2: Criminal LiabilityMany people can understand having to pay someone back for issuing him or her a bad check. What most people do not know is that in many states it is actually a criminal offense to issue a bad check, knowing you had insufficient funds when you issued it. Again using North Carolina as an example: In North Carolina, if you have issued a check for over $2,000.00 it is a felony and you could face serious penalties as a result. The easy solution to this problem is not to write the check, but another easy way to avoid a possible criminal charge is to simply repay the check before you are charged. In North Carolina before a person can bring a civil claim against you or before the State can bring a criminal charge, you must first be informed that the check bounced, and the person must demand repayment. If you have written a bad check, you need to research your local statutes regarding your rights, and you may need to hire an attorney.
What You Can DoIf this has happened to you or someone you know, and a demand has been made for the repayment of the funds, you may need to hire an attorney. If you choose not to hire an attorney, then I would advise you to immediately repay the entire sum owed and get a receipt from your transaction. This should be your #1 priority in getting it resolved quickly and without liability. Likewise, if someone has written you a bad check, and you have demanded repayment and they have refused, my advice would be to seek legal counsel because in many jurisdictions the statutes will govern how to collect for a bad check. Given the current economy, more and more bad checks are being written every day and this legal guide is to give you an idea of the serious consequences you could face if this mistake is made.