How Do I Collect on a Bad Check?
Full Question:
Answer:
The answer will depend on whether fraud was involved, or the person who wrote the check unknowingly had insufficient funds. Bad checks are coverd by both criminal and civil law. To be prosecuted criminally, knowledge of insufficient funds is required.
According to New Jersey law, cashing a bad check means a person tries to pass a check knowing that there isn’t enough money in the account to cover the amount of the check. A person can be said to have known about the lack of funds if the account was closed prior to the check, or if the person who wrote the check doesn’t fix the overdrawn balance of the account within 10 days after receiving notice. N.J.S.A. 2C:21-5. If the amount of the check was less than $200 it is a disorderly person’s offense which can result in up to six months jail, a fine of up to $1,000, restitution in the amount of the bad check(s), community service and/or probation.
There are some NSF checks, or bad checks that are usually not considered fraud and are normally exempt from be punishable by bad check laws. Section 3-104(2)(b) of the UCC, defines a check as "a draft drawn on a bank and payable on demand." The first type is a postdated check, since it is not payable on demand, is usually considered, by most states, that the writing of a post-dated check is not a fraudulent act and is not punishable under bad check laws. In NJ, under civil statutes, the person may be sued in civil court for the face amount of the check, attorney fees, court costs, costs of mailing a demand for payment, and damages in an amount equal to $100.00 or triple the amount of the check, whichever is greater, but not to exceed $500.00.
