How to Collect Money From a Bad Check

If you've been handed a bad check, the unfortunate truth is that it can be very difficult to collect the money you're owed. However, don't give up hope--there are ways to collect money from a bad check passer. You just need to exercise some patience and persistence.

Instructions

Difficulty: Moderately Challenging

Things You’ll Need:

• Attorney

1. Keep the check. You'll need it in hand, no matter what course of action you decide upon in the end.
2. Consult your attorney immediately. She will be the best source of advice as to what actions you are and are not permitted to take in the state in which you live. You should be prepared to press charges against the person who passed the check if you can't collect the money you're owed.
3. Contact the bank where the person who passed the check has an account. Ask whether the account has sufficient funds to cover the check, since the bank is permitted to release this information (but nothing more specific). Continue to call the bank every day until the individual finally has enough money in the account to cover the check. Then go to the bank and cash it right away.
4. Ask the bank whether they'll exchange the personal check you were passed for a cashier's check, in the event that they won't let you cash the check you were passed. If there are sufficient funds in the account to cover the check, the bank has the authority to claim the account holder's money, even if they won't cash the check for you. Thus they'll usually be willing to exchange a personal check for a guaranteed check if they know for certain they can get their money back.
5. Get in touch with your local district attorney's office, or have your legal representative contact the DA. Initiate legal action against the person who passed the bad check if your efforts to collect your money remain unsuccessful. You also have the option of taking the person to small claims court if the amount of the bad check is $5,000 or less.

Tips & Warnings

• Establish a strict and protective check policy, since the best way to avoid financial losses is to avoid bad checks in the first place. Always ask for current, valid ID and verify the individual's address (the information on the check should match the information on the customer's ID). Only accept checks up to a certain monetary limit, and take immediate action if a bad check is passed your way.