If you’ve had a checking account, at some point you’ve probably been in the red. It’s especially an easy thing to do in this Electronic Age when all you have to do is whip out your debit card and keeping track of your balance can be either as easy as checking it online or as difficult as trying to remember your bar crawl last Saturday night. And on at least one occasion, you might have written a check when your balance was low but thought you’d be able to get money in your account before it cleared.
Unfortunately, if you don’t cover that check, it could end up costing you a significant amount more than what you wrote the check for.
Under Colorado law, a person who writes a bad check could be liable for at least the amount of the check plus up to $20.00 for a non-sufficient funds fees. If the person you wrote the check to hands it over to a collection agency, you could be liable for the amount of the check, plus 20% of the amount in collection costs.
That’s if you pay within 15 days of being notified that the check bounced. After that, you could be liable for up to three times the amount of the check.
You may have a defense if you can show:
- That the account contained sufficient funds or credit to cover the check, draft, or order at the time the check, draft, or order was made, plus all other checks, drafts, and orders on the account then outstanding and unpaid;
- That the check, draft, or order was not paid because a paycheck, deposited in the account in an amount sufficient to cover the check, draft, or order, was not paid upon presentment;
- That funds sufficient to cover the check, draft, or order were garnished, attached, or set off and that you had no notice of such garnishment, attachment, or setoff at the time the check, draft, or order was made;
- That you were not competent or of full age to enter into a legal contractual obligation at the time the check, draft, or order was made;
- That the writing of the check, draft, or order was induced by fraud or duress;
- That the transaction which gave rise to the obligation for which the check, draft, or order was given lacked consideration or was illegal.
These are only the consequences in civil court. There are also criminal penalties for writing a bad check. Make sure you know what your balance is before you go writing any checks you bank account can’t cash.
While bankruptcy may not get rid of criminal fine that arise from writing bad checks, it can help you get rid of other dischargeable debts and allow you to repay your fines for writing bad checks. If you’d like to learn more about bankruptcy, please come in for a free, no-obligation consultation with an experienced bankruptcy lawyer. You can call 303.331.3403 to schedule an appointment or use our online scheduling system to set a time that is convenient for you.