A bad check is a check that you cannot cash because the person who wrote the check: (1) doesn’t have enough money to cover it (“insufficient funds”), or (2) told the bank to “stop payment” on it without having a valid reason for doing so.
Writing a bad check is a crime if the check writer knew that there were insufficient funds to cover the check and intended to defraud you. It is also a crime to forge a check or write a fake check. If you believe you are a victim of a crime, report this to your police department, sheriff’s office, or district attorney’s office.
You may also sue someone who writes you a bad check without having a valid reason for doing so. You may also recover damages equaling three times the amount of the check, up to a maximum of $1,500, if you meet certain conditions:
- You must send a demand letter to the person who wrote the check. Send the letter by certified mail with a return receipt, and keep a copy of the letter and receipt. You may use this sample “bad check” demand letter if someone wrote you a check but had insufficient funds to cover it. You may use this sample “stop payment” demand letter if someone stopped payment on a check without a valid reason.
- If the check writer does not pay you within 30 days, you may file a lawsuit.
- Where to file your lawsuit:
- If you are asking for $10,000 or less: File in small claims court. Note that you cannot have a lawyer in small claims court because that court is meant to resolve disputes quickly and inexpensively.
- If you are asking for more than $10,000: File in the civil division of the superior court. Note that different rules apply in superior court and in small claims court.
- What to show the judge at your court hearing:
- A copy of your demand letter and the signed certified mail receipt that proves you mailed the letter.
- Any documents related to your case, like a copy of the bad check, bank statements, receipts, letters or emails to or from the check writer, and notes of any conversations you had with the check writer.
- You do not have to prove that the check writer intended to defraud you or wrote the bad check on purpose. However, if the check writer told the bank to stop payment on the check to resolve a good faith dispute, you may not be able to recover damages or other costs.