How to Recover a Bad Check
Sometimes accepting checks can put you in a financial bind if the checks are bad. Bad checks are checks that are returned to you with notations such as "Non-sufficient Funds," "Stop Payment" or "Account Closed." Receiving bad checks can cause you to overdraw your own bank account if you deposit the checks and count on the money's being there when you need it. If you are stuck with a bad check, you need to follow the correct steps to collect the money before you can report the check to the police department.
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Things You'll Need
- Bad check
- Demand letter
- USPS certified letter for NSF/bad check
- Addendum
Instructions
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1
Contact the person who wrote the bad check by telephone and ask for payment. On most occasions, the person will promise to pay and will do so. However, some people agree to pay hoping that you will forget, which means you will need to use the addendum.
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2
Fill out the addendum, which is a document that identifies the check, the person, bank information and the physical appearance of the person if known. At the bottom of the addendum, write the date of the first call, your initials and any remarks. If the person does not pay, you will need to write a demand letter.
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3
Fill in the information on the demand letter. This will include the person's name, the type of bad check you have, the check number, issued to, date of check, the amount and the return fee. Sign the letter with your name or business name, address and phone number. This gives the person 10 days to resolve the issue. Mark the date of the letter and any remarks on the addendum.
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4
Follow up with a phone call if the payment has not been made after 10 days. Mark this phone call on the addendum, and next and send a certified letter in the mail.
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5
Fill out the information requested on the certified letter. Add your name and address. This letter tells the person that she has 30 days to pay or you will file a small claims suit, and that criminal charges could also apply. In most states, it is a criminal offense to write bad checks and after these steps are followed, a person can be arrested if she fails to pay.
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Send the letter by certified mail so that you have a signed receipt proving that the person received the letter. Keep this receipt with the addendum and write down the date that you mail the letter. Wait the 30 days to see if payment is made. If not, follow step 7.
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7
Contact the police department and provide copies of the addendum, the demand letter, and the certified letter and the receipt. Ask the police to pursue the matter and press charges against the person. When the person goes to court you can ask for a payment; at this time most people will pay it to have the charges dropped.
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File a small claims form with your local court if you don't want to involve the police. This should be done only if the police recommend it, because it will cost money to file. However, having the person arrested is free if the police take the case.
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Tips & Warnings
-- Some states have certain dollar amounts that are required before the police will get involved. Check with your local police department.
-- Keep copies of all correspondence.
Never give the check back to the person until full payment is made.
