How to Handle a Bounced Check

Handle a bounced check quickly to avoid legal problems.

Checking account holders write checks to pay for goods or services, and the monies behind these checks must be in a checking account to cover check amounts written. If your checking account lacks sufficient funds, a check may bounce, which means that the bank dishonors the check and the check bounces back to the payee of the check. Not only is a bounced check a crime in many states, but it may also damage your credit history.

Instructions

1. Call the bank immediately after you receive notice of the bounced check from the bank to find out about its bounced check policies. If you have overdraft insurance on your account, another funding source may cover the amount of the check. You may have time to deposit money into your checking account to cover the check if the merchant submits it a second time. If this is not possible, the payment situation now lies between you and the payee.

2. Contact the merchant to whom you wrote the check. As long as you deposited sufficient funds into your checking account, ask the merchant to resubmit the check a second time. If the merchant agrees, the check should clear. The merchant may not agree to resubmit the check, however. Ask the merchant if you can pay directly with cash if the merchant is unwilling to resubmit the check.

3. Call the local district attorney's office and speak with a representative in the bad or worthless check program to follow up on the bounced check. If you have not yet paid the amount you owe the payee, pay the amount owed through the district attorney.

Tips & Warnings

• Expect handling fees and interest fees in addition to the original amount of the bounced check. You must pay these fees in full along with the original amount of the bounced check to settle the debt. Your bank may also charge you an insufficient fund fee.

• Each state has individual laws and regulations regarding bounced checks, but you will likely have a specific time limit for resolving the bounced check matter. If you do not pay the debt owned within this time limit, the matter may escalate to a lawsuit.

References

• Northwest Justice Project: What to Do if Your Check Bounces
• Free Law Answer: Bounced Checks

Resources

• Carreon and Associates: State Collection Laws