Dayton Bankruptcy Attorney: Passing Bad Checks

passing bad checks

This site has blogged before about how debt collectors cannot threaten to bring criminal actions for an unpaid debt.  While this is true for most debts, there is an exception for creditors who received a check that bounces.  If you are caught passing bad checks (i.e. you write a check to a creditor and it bounces) the creditor may have the right to turn the matter over to law enforcement for criminal prosecution.

Section 2913.11 of the Ohio Revised Code says that “No person, with purpose to defraud, shall issue or transfer…. a check or other negotiable instrument, knowing that it will be dishonored or knowing that a person has ordered or will order stop payment on the check or other negotiable instrument.”  A person is presumed to “know” that a check will be dishonored if the person writing the check did not have an account with the bank on which the account was drawn at the time he issued the check, OR the check was properly refused payment for insufficient funds upon presentment within 30 days after issue, and the liability of the check issuer does not make good on the check within 10 days after receiving notice of the dishonor.

Simply Not Worth It

Writing a bad check can have both criminal and civil penalties.  Passing bad checks can be punishable with a substantial fine on top of the amount for the check and even jail time.  The amount of the check will determine if a person is punished with a misdemeanor or a felony charge.

Individuals who use cash advance businesses typically write a post dated check for the amount they borrowed plus the fees for borrowing this money.  If this check does not have sufficient funds and the individual does not make good on the check within 10 days of receiving notice of default, the cash advance company has the right to turn the matter over to the police for criminal prosecution.

If an individual has bad checks that he cannot make good on and is considering filing bankruptcy, it is best to file as soon as possible.  If a creditor initiates criminal proceedings against the issuer of the check, the Automatic Stay will not stop these proceedings.  Although the Automatic Stay stops most legal proceedings, it does not stop criminal prosecutions.  Bankruptcy also will not discharge any criminal liability for restitution, costs or fines associated with the criminal prosecution.  With all that being said, a bankruptcy generally discharges the underlying debt related to the bad check.  That is why it is important to file bankruptcy before a criminal proceeding can be initiated against you for passing bad checks.