I Got a Bad Check – What Do I Do?

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A “bad check” is a check that you cannot cash.  There are two kinds of bad checks: 

  • Non-Sufficient Funds – the person who wrote the check didn’t have enough money in the account to cover the check. 
  • Stop Payment -- the person who wrote the check told the bank to stop payment, although there may be money in the bank account to cover it.

NOTE 1:  Sometimes there are valid reasons for stopping payment on a check. For example, the goods or services paid for with the check were never delivered or were defective. Stopping payment for this reason is called a “good faith dispute.”  If you go to court over this and the person who wrote the check can prove that a good faith dispute exists, the judge might not award any damages.

NOTE 2:  A bank may cash a check even if the writer of the check had put a stop payment on it. If the “stop payment” was done orally, such as by phone, the stop payment is only valid for 14 days. If the “stop payment was done in writing, it is valid for 6 months. (“Stop payments” may be renewed.) Therefore, if a bank cashes a check after the “stop payment” time has passed, you cannot sue the bank.

If someone writes you a bad check without a good reason, you can sue for 3 times the amount of the check - up to an additional $1,500 (maximum) - plus the original amount of the check.

If someone stops payment on a check without a “good faith dispute,” you can sue for the amount of the check -- plus 3 times the amount of the check, with a minimum of $100 and a maximum of $1,500.

However, BEFORE you can file a “bad check” lawsuit in small claims court,
you must:

1. Send a “demand letter” to the person who wrote the check. Ask the post office to send it by “certified mail” with “return receipt requested” (there will be a fee).

In your letter, demand to be paid within 30 days -- by cash or money order -- the following amounts: 

  • the amount of the check, 
  • the cost of certified mail and 
  • the service fee, charged by your bank, of up to $25 (and up to $35 for each subsequent check).

To see a sample “Bad Check" demand letter, click here. Opens new window

To see a sample "Stop Payment" demand letter, click here. Opens new window

2. Then wait 30 days.

If you are paid within the 30 days, your dispute is resolved. (You cannot sue for the check or for bank fees or for “statutory damages.”)

3. File your lawsuit.
If you are not paid in 30 days, you can ask the court to order the other side to pay you the full amount of the check, plus the cost of certified mail, plus your bank fees, plus the “statutory damages” of 3 times the amount of the check, with a minimum of $100 and a maximum of $1,500. To learn how to do this, click here.

4. Attend your court hearing.  Be sure to take: 

  • A copy of the demand letter you sent. 
  • Proof from the post office that you sent the letter certified mail. 
  • Any other papers you need to prove your case. For example, bank statements, notes about your conversations, or any other letters to or from the check writer.




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