Money Management Tips: What Happens When A Check Bounces

What to expect when you write a hot check: legal consequences, fees, fines and charges, and how it affects your credit rating and checking account.

Many of us take our checking accounts for granted, pulling it out for most purchases we make, and sometimes, after an accounting error, we find ourselves overdrawn at the bank. Usually this is just an oversight and can be rectified simply by depositing extra funds into the account, but it will definitely cost you. Writing a bad check nowadays, whether it was intentional or an oversight, means big bucks. First, the person or company to whom you wrote the check will charge you $20 or more, depending upon that state's laws, for each time the check bounced. So, if they send the check through once and it bounces, and then they send the check through a second time and again it bounces, the company will charge you another $20. Even if the original check was only $5, you will still be charged the $40, or more, by the company that is holding the check. In addition, the bank will charge you a penalty of $20 or more, for each time the check bounces. If the check bounces twice, you will be charged $80 or more in penalties, between the bank and the company holding the check, plus the actual amount of the check.

After the check bounces twice, and the money still isn't in the bank to cover it, usually the company will stop sending it through, and will instead try other collection methods. One method is to call you and ask you to come pick up the check, by first paying the bounced check charges. If you fail to do this, the company has every right to report you to the police and ask that you be arrested. Sometimes it takes months before a company will decide to do this and by then, many people think there will be no repercussions.

If you are arrested for writing a bad check, and the check is not an astronomical amount of money, you will generally just appear in court and the judge will order you to pay the check, the bounced check charges, and all court costs and fines within a certain amount of days. Failure to do so is a contempt of court, and you will likely be arrested again, and this time, given a more severe punishment. Besides ordering you to pay the expenses, a judge can also sentence you to community service or even probation. If you are seen in court more than one time for bounced checks, you might then be given jail or prison time.



Although most bounced checks aren't written with the intent of conning anyone, the innocent person who has just made a mathematical error is likely to pay the same amount of money as someone who has done it on purpose. You can cut down on the cost of a bounced check by asking your bank if they have overdraft protection. If you accidentally write checks for more than the amount in your account, the bank will pay the company to whom you wrote the bad check, but the bank will still charge you the bounced check charge. The overdraft protection does keep you from being charged repeatedly by the company and the bank together, so this can save you a little bit in the long run.

If you have written bad checks on purpose, it's not only dishonest and unwise, but can cost you your checking account, too. As a matter of fact, if your checking account has been closed because you've written bad checks and can't cover them, your name is put in a data bank with others in the same predicament. Later, when you try to get an account at another bank, your name is pulled up and details of your last checking account can be seen by the new bank management, who will deny you a checking account with them until you've paid off your old checking account debts. Checking accounts are extremely handy, so keep a good eye on yours, and if you ever do make a mistake, correct it as soon as possible to prevent future problems.

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