Receiving a bad check is a headache that can cost time and money. Since writing bad checks typically does not appear on a credit report, it is important to trust the person who issues you a personal check. Another option is to request another form of payment such as a credit card or money order.
If you are a business owner or landlord, a bad check can be a serious disruption. Your options for recourse will depend on a few factors that are dictated by the state in which the check was issued: Utah has its own state-specific laws.
Regardless of whether charges are filed, be sure to strictly abide by lawful debt collection methods, emphasizes the Utah Courts. You do not want to run afoul of the law in recovering money that is rightfully owed to you.
Are Bounced Checks a Crime?
Knowingly writing a bad check that bounces from a bank account with insufficient funds is considered a crime. Passing a bad check is considered to be check fraud and recognized as illegal at the federal level.
Legal action against a bad check writer happens at the state level, and the check writer may need to seek the help of a criminal defense attorney. State laws can vary regarding specific criminal codes and criminal charges. There can be many lingering negative consequences for knowingly writing a bad personal check.
In addition to civil penalties and possibly criminal charges, FDIC Section 19 specifies that any person convicted of theft, check fraud, dishonesty or money laundering, etc. is ineligible for employment at any financial institution that is FDIC-insured.
None of this is solace for the payee of a bad personal check who must recover the amount of the check, likely in addition to fees for the bounced check and possibly legal services. You can be assessed a returned check fee for depositing a check that bounces into your own bank account in addition to any fees assessed to the check writer.
Getting Money From a Bad Check
It is advisable to contact the bank from which a check is drawn to find out whether the account has sufficient funds before risking more service charges. It is possible that there was some oversight or account issue that has been resolved and there is now enough money to cover the check. Of course, if this is not the case, you will need to escalate your efforts to collect. You have a few options to explore in recovering your money.
You will want to contact the check writer or payor directly to request the payment by another method. If you cannot reach them directly, send a letter stating your formal demand by certified mail. A check recovery service or collection agency are additional options. If all else fails, you can file a case in court to recover the owed funds.
Going to court can be a costly endeavor, so it is advisable to seek legal advice in your state. Regardless of whether charges are filed, be sure to strictly abide by lawful debt collection methods, emphasizes the Utah Courts. You do not want to run afoul of the law in recovering money that is rightfully owed to you.
What Are Utah State Laws?
If you decide to go to court, Utah has laws that require a plaintiff to first issue notice to try and recover the amount of the check from the payor. The check recipient then issues the payor written notice that their check was not honored. Upon receipt of the notice, the check writer must make good on the payment within 15 days and pay an additional $20 service fee.
Utah code states that if the total amount including attorney fees less court costs is under $15,000, the case can be filed through Utah small claims court as of May 2022. This amount increases to $20,000 starting in 2025 through 2029.
The check receiver must go through the civil court system to get his money back and may press criminal charges against the check writer as well. If the check or series of checks totals between $500 and $1,500 within six months, the crime will be a Class A misdemeanor, notes the Utah State Legislature. Amounts higher than this will result in felony charges and may include jail time and registering with the Utah White Collar Crime Registry.
- You may also contact the district attorney's office to pursue criminal charges against the bad check writer if she fails to reimburse you for the check after receiving written notice.
Hashaw Elkins is a financial services and tax professional, as well as a project management consultant. She has led projects across multiple industries and sectors, ranging from the Fortune Global 500 to international nongovernmental organizations. Hashaw holds an MBA in Real Estate and an MSci in Project Management. She is further certified in organizational change management, diversity management, and cross-cultural mediation.