Bad Check Laws

• All states have laws dealing with "bad" or "bounced" checks, known in the banking industry as NSF ("not sufficient funds"), which are checks written on an account with insufficient funds. State laws provide both criminal and civil penalties for people who engage in this behavior. For example, someone who issues a bad check may be subject to jail time as well as a lawsuit for an amount significantly more than the original value of the check.
  
  

Restitution Programs

• Some state and county governments administer restitution programs for writers of bad checks. These programs require the guilty party to complete a banking education course and compensate the check recipient. These programs exist to prevent further strain on busy court systems: The bad check recipient does not have to file a lawsuit or testify in a criminal or civil case, and the check writer can avoid a lawsuit or criminal conviction.
  
  

Eligibility

• Eligibility for bad check restitution programs depends on the state or county government that sponsors the program. An individual with a history of writing bad checks may not be eligible for the program. In such cases, the state's attorney's office may simply prosecute her for writing NSF checks. Some checks, such as postdated checks, may not be eligible for collection through the program. Check recipients may be required to attempt collection from the check writer before submitting the case to a restitution program. If the check writer fails to respond or pay, the recipient can forward the check writer's information to the local agency that manages the restitution program for review. This is often the state's attorney's office.
  
  

Getting a New Account

• If someone writes a bad check, she risks losing her bank account, particularly if it's a common occurrence or bounced check fees put her account into a negative balance that she can't pay off. Once her account is closed, she may have a hard time finding other banks that are willing to work with her. However, some banks offer accounts designed for people who have troubled banking histories. These accounts may require account holders to complete a course in checking account management. The bank may also charge extra monthly maintenance fees until an account holder establishes a track record of responsibly using his account.