Writing a check against insufficient funds generally exposes the issuer to a variety of civil and criminal penalties in New Hampshire. Individuals and merchants to whom such NSF checks have been issued may set in motion procedures created by the state to collect the amounts due; if they are unable to collect, they may press criminal charges.
When a person issues a check in New Hampshire knowing that the bank it is drawn on will refuse to pay it, he is committing fraud and is guilty of issuing a bad check. The issuer's bank generally returns a bad check to the payee with an explanation of the reason it's being returned unpaid, usually NSF or account closed.
Upon being notified that the issuer's bank has bounced a check, many merchants and individuals prefer to call the issuer first and attempt collection informally, giving the issuer the benefit of the doubt that the error was unintentional. The first formal step in New Hampshire's procedure is to mail a 14-day demand for payment notice via certified mail with a return receipt requested. If payment is not received within 14 days after the issuer received the notice or if the certified mail is returned as unclaimed, the payee may press criminal charges by reporting to the local police department.
A payee may file a police report by submitting the original check, all correspondence and receipts to the local police department, which will make further collection attempts on his behalf. If unable to collect the money, the police will issue an arrest warrant for the issuer of the bad check. If the issuer has to go to court, the payee may have to testify.
An issuer of a bad check who fails to pay when a payee or a police department attempts to collect, may face criminal and civil charges determined by the court. According to the New Hampshire state law, a bounced check under $500 is class B misdemeanor. A bad check over $500 but less than $1,000 is a class B felony. A bounced check over $1,000 is a class A felony. An issuer of a bad check may pay a civil penalty that includes the amount due, interest, court fees, reasonable collection costs and $10 per day (a maximum of $500). Criminal penalties may include a $200 fine and up to one year in jail or both if it is a repeat offense.
Not all checks returned unpaid by the issuer's bank are considered bad checks subject to the New Hampshire statute. For instance, the issuer may issue a stop payment order on the check, which requires the bank not to honor the check. In addition, a post-dated check which is subsequently returned NSF or due to a closed account is not considered a bad check under the statute, since post-dated checks are not payable "on demand." Likewise, checks issued in payment of amounts due on account are not prosecutable, although checks issued for payment of goods and services on delivery are. Recipients of such checks do have other options available to them, such as filing a lawsuit against the issuer.