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 Statute of 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 charges.

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 or;

(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.

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Comments

  1. Marie says

    I wrote a check for $51.45 in December, 1996,I did not know this check was bad since I never received a bank notice or letter from merchant. In January, 1998 the merchant filed an affidavit against, which was never delivered to me, in February, 1998 a warrant was issued for my arrest, again I was never served with a warrant.I lived in this county for 7 years after charges were filed. On July 26,2014 upon returning home from work I checked my mail and there was an envelope from Pontotoc County Sheriff’s Dept, enclosed was a copy of a 1998 affidavit and a copy of a warrant ordered in 1998. The warrant is not a capias warrant. 18 years has passed and this is the first I have ever heard of this $51.45 check.

    • says

      That sounds odd. Claims for bad checks, and civil arrests warrants, usually expire faster than the timelines you state, and it seems you may be the victim of some sort of scam. The Debt Help Lawyers at this site will review any debt or credit related documents for free and tell you if this is something you can ignore or if its something you need to handle. You can fax any documents you want reviewed to 866-773-6152 and get a FREE no obligation case review, just make sure to include your contact info.

  2. Jacqueline Johnson says

    I took out a payday loan 10-17-2008. I made about 4 payments and then could not afford to pay on the loan any longer. A company is now calling me stating they have assumed this debt from the payday loan company and will be filing criminal charges against me for fraud because the electronic debit did not go through back in 2008 unless I pay them right now over the telephone. Can this collection company continue to try and collect on this debt which is now almost 6 years old.. I am located in the state of California

  3. Alan Paradis says

    I had taken out a payday loan in early 2008. After not being about to pay on it, the debt was sold off to a debt collection company. I filed bankruptcy in 2010 and it was discharged in 2011. As far as I can tell this debt was put on my bankruptcy. Now all if a sudden there is some mediation company calling me stating that I need to pay this debt or they will send the case off the the courts and that I will be arrested and charged with 3 counts of felony charges. I had called the original debtor and they said they never contracted any mediator to collect this debt and that it was sold off to a debt collector in august 2008.

    • says

      UNTRUE. Don’t worry, your debt got sold to a bottom feeder just looking to prey on the weak. Pay nothing, and FYI as a general rule, collectors who make threats like this often are not viable fly by night companies you can simply ignore.

  4. joshua says

    Ok I wrote a check in 2007 of October this woman calls me and says she will be issuing a warrant for my arrest so I told the woman about statue of limitations and she says the law had changed so I just hung up on her as I figured she was trying to scam me for the money anyways she knew she was wrong

  5. loyal says

    I post dated a check for $2,000 as down payment on a car, the dealer told me if i didnt have the money the people would work with me, well several weeks later the motor went out and then the transmission, i picked the dealer and he said he would repair all the repairs and take care of the check for the down payment, well he didnt that was in 2011, now dec. 2014 im getting calls saying a warrant will be issued for MY arrest. I even paid the collector the settlement portion of it and there still threating me.

  6. Heather says

    National Recovery Services is calling me dating that I took out a Payday loan in 2005 and it is unpaid. They say my check did not clear. And that they are going to serve me with a court order tomorrow to pursue me for a fraudulent charge and the $255 plus penalties for a total amount of $530. Is there a statue of limitations protecting me from this? It has been NINE years.

    • says

      There are limitations, yes. And National is not going to do what it says, because it cannot. But it has violated the FDCPA, and you are entitled to money from them for that. Call 888 595 9111 now and get the Fair Debt process started.

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