REASONS YOU SHOULDN’T WRITE A BOUNCED CHECK
So, you’re a little stuck.
Your checking account is already used to hovering slightly above a zero on a regular basis, but this time it is slightly worse.
You do not have enough on your checking account, there is no available credit on your cards but you absolutely have to make one more payment before payday – which is probably only a few days away…
Since payday is only a few days away you pull out your checkbook, cross your fingers and write a check.
Bad move.
Sure, according the law, intent is almost more meaningful than action. Mistakenly writing a check that will bounce is very different than knowingly writing a check that will bounce and while Simply owing a debt is not considered criminal, proffering payment that is not actually valid is considered defrauding the person you are trying to pay; and frankly – what is a truer measure of intent than action?
But just in case you do not have quite the overactive conscience; enough for the argument of ‘intent’ and ‘integrity’ to hold sway, here are a few more reasons not to write a bounced check (even if your heart is in the right place)–
- Your Bank Won’t Be Particularly Ecstatic
Usually some banks are merciful enough to consider paying a bounced check and issuing an over draft fee – but that is if you’re lucky. Otherwise they will return the check, and if a similar issue reoccurs, you’re likely to have your account shut down and reported to Chexsystems who will make it difficult for you to open subsequent accounts, even elsewhere.
- Your Credit Report Will Take a Gentle Blow
While a bad check may not necessarily show up on your credit report or lower your credit score there are databases that track bounced checks (Including Telecheck or Chexsystems). A bad record in those databases, means difficulty writing checks elsewhere and even though these databases are not part of your FICO credit score, which is the score used for most important loans like auto and home loans, but they might be used in “alternative” credit scores and If the check was for a loan payment, your credit is more likely to suffer.
- You’ll Pay for Not Being Able to Pay
Quite the irony right?
For starters, you’ll pay fees to your bank: overdraft charges or non-sufficient funds (NSF) fees which might amount to up to $35.
You are also likely to pay a fee to whomever you wrote check to; they get dinged for depositing bad checks, and they’ll pass those charges on to you. And after a check bounces once, your payee might try to re-deposit the check to see if you have funded your account. If not, expect to pay even another round of fees
- Criminal Charges That May Haunt You Forever
Cases of bounced checks may be prosecuted and these charges could be filed either as a misdemeanor or a felony – depending on the prosecutor’s choice.
If it’s filed as a misdemeanor, you could be looking at up to one year in a county jail and a maximum fine of $1,000 in some states. As a felony you could be looking at get to three years in jail and a maximum fine of $10,000.
There are possible civil penalties as well. The payee (that’s the person or company that you wrote the check to) can sue you for the amount of the check in addition to damages of up to $1,500.
Rather Than Write a Bad Check…
- Balance Your Account
Keep an updated track of your account balance. This translates to knowing how much you have and how much every payment will bout to leave your account at all times (including both pending payments and outstanding checks).
- Keep a Small ‘Shock-Absorber’
Sometimes it’s not enough to plan thoroughly and hope for the best, consider going the extra mile and leaving a little something in your account for ‘just incase’.
- Consider Over-Draft Protection
If all else fails, consider overdraft protection. If you use it as a safety net (as opposed to relying on it for cash-flow) you’ll rarely pay overdraft fees, and the plan will not be as expensive as it actually is.
And whatever happens, prudence is the sure-fire solution matters of this nature.
Yes. Even the best of us have days when we are tempted to delve into immediate solution to combat these wearying money problems; so, if you have considered writing a bounced check – no prejudice at all. Is it really worth it though – If one solution is only an invitation to bigger problems?