Bad checks have a statute of limitation -
typically 2 years! (see
cancelled checks below)
If a debt collector is collecting a bad check debt which is past the statute of limitations, or you believe you are a victim of illegal or unfair debt collection practices, submit your information to a FREE* Fair Debt Lawyer by:
The debt collector may just be liable to you for statutory damages of up to $1,000, plus any actual damages suffered, plus attorney fees!
First, we need to be clear on the difference between a "bad
check" and a check written with the "intent to defraud". In simple terms, a bad
check is usually the result of poor math calculations or your bank making a
miscalculation. In either case, your intentions were good when you wrote the
check. You thought you had enough money to cover the check and can show where
the mistake was made thus proving your good intentions. Crooks, on the other
hand, write bad checks with the intention of ripping people off.
Writing checks when you know you do not have the money to cover them is
a serious crime that, if caught, can land you in jail or even prison.
Make no mistake about it, writing bad checks is always illegal.
However, just about every state has a statute of limitations (SoL) on the
collection of bad checks; typically 2 or 3 years. If you receive a collection
notice or call about a bad check, don't panic! First, check to see if the
Limitations has expired.
Next, decide whether you want (or can afford) to pay the debt.
If you plan to pay the debt, be sure that you are only paying what state law
allows. Check your state
law to determine what fee(s) (if any) collectors can add to the face
value of the check. Many states limit collection fees to a certain amount such
as $100 or to a percentage of the face value of the check and prohibit interest
The FDCPA, Section 808 makes it an unfair practice to
collect "any amount (including any interest, fee, charge or expense . . .)
unless such an amount is expressly authorized by the agreement creating the
debt or permitted by State law."
Debt collectors may attempt to collect a fee or charge in
addition to the debt if either:
(A) the charge is expressly provided for in the contract
creating the debt and the charge is not prohibited by state law, or
(B) the contract is silent but the charge is otherwise
expressly permitted by state law.
Conversely, debt collectors may not collect an additional
amount if either:
(A) state law expressly prohibits collection of the amount
(B) the contract does not provide for collection of the
amount and state law is silent.
NOTE: If state law permits collection of
reasonable fees, the reasonableness (and consequential legality) of these fees
is determined by state law. So, unpaid debts sent to collection agencies,
whether closed or charged off MAY still accrue charges and fees IF the credit
contract allows it and State law does not prohibit it. Many states do
limit the amount that can be charged and, if the State does have a law, it
overrules the credit contract.
Cancelled Checks: When you write a check, it's
like writing a promissory note that says the funds are available and when the
instrument (in this case a check) is presented to your bank, funds will be
withdrawn from your account to cover the amount of the check. When this
happens, the debt is, in effect cancelled, thus the term "cancelled check".
However, the same term can also be used when you cancel a check.
For instance, after sending a check, you change your mind, you can ask your
bank to cancel (stop payment) on the check. This means the bank will not honor
the check if presented. Banks usually charge a fee for this service.