Texas Bad Check Collection Law
Texas Penal Code 32.41 provides the basis for criminal prosecution for theft by fraudulent issuance of a dishonored check. Collection fees can charged by banks and other bad check recipients.
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Context
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Texas bad check laws can be applied in both civil and criminal cases. Criminal charges can be brought against the check issuer. Recipients of bad checks can charge an issuer a civil penalty as well.
Issuance
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Penal Code Section 32.41(a) states that a person commits a deceptive theft offense by issuing a check on an account that he knows has insufficient funds or when the checking account is nonexistent.
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Considerations
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The issuer of a dishonored check can avoid prosecution by paying the full amount of the check to the check recipient within 30 days after issuance or 10 days after notice that the check was dishonored. The law provides that recipients may send a notice to the issuer that allows the issuer to avoid prosecution. The specific language of the notice is quoted in Penal Code Section 32.41(c)(3).
Penalties
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If the dishonored check was issued for payment of a child support obligation, the offense is a Class B misdemeanor. Otherwise, the offense is a Class C misdemeanor.
Texas Business and Commerce Code Section 3.506(a) limits the amounts in fees that can charged for dishonored checks by non-bank holders to $30. Banks can charge any amount so long as the issuer was provided notice of such charges before issuance of the check.
Exceptions
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Penal Code Section 32.41 does not automatically apply to issuance of a post-dated insufficient-funded check except where, at the time of issuance, the issuer never intended to pay the check recipient in full.
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References
- Photo Credit balancing checkbook image by palms from Fotolia.com
