How to Collect on a Bad Check

Whether you are running a business or acting as an individual, receiving a bad check can set your account back. Within three days you will be notified by your bank if a check was bad. You are then charged a fee from your bank of $25 or $35 to cover paperwork. Then it is up to you to pursue your money from the individual that wrote it out to you or your company.

Step 1

Use bounced check services. There are companies and one in particular that has the name Bounced Check Services that pursue the person who wrote the bad check and go through steps to get your money. If you are running a company you may want to use such a service in order for them to keep track of those that write out bad checks and do the pursuing on your behalf. First warn customers that there will be a fee if their checks are returned. Then they will be aware that they will have to pay this in order to continue to use your services. The bounced check services will contact the person by calling them, writing them letters, and will threaten to report them to the credit bureau. If all else fails, they will send a notarized letter by a state attorney requesting the money to be paid along with extra fees.

Step 2

Call the individual that wrote out the bad check. Let them know that their check has been returned to you and that they will need to pay the bank fee that was charged to you. If they refuse to pay then follow the next few steps, but most people are aware of the law and will pay at least the amount of the check.

Step 3

Keep the check and call the bank daily or weekly to see if the funds are in the account. Once the funds are in the account then go immediately to the bank to cash the check. This will not get your money back regarding the fee you paid at your bank for the returned check, and this is mostly what an individual would do rather than a company, however, you will at least be able to get your money for the amount of the check.

Step 4

Report the bad check to the city. This is the best way in order to receive any extra fees you put out along with the amount of the check. If the person refuses to pay you have the right to report it to the city along with fees you paid to your bank and any extra fees for waiting or interest you may want to charge the individual. The person that wrote the bad check will receive a letter from the city that they have so much time to pay the fees otherwise they could be fined, go to court, or go to jail, depending on the amount owed and the state you live in. For instance, if you live in Texas, you will have no alternative other than to pay what is demanded by the city or go to jail. There would be no fine and no court date.

Step 5

Go to court. In most states, as long as the check is over $1,000 you can have the individual served to go to court for the amount of money they owe you in a small claims court. You can have the defendant pay for costs for your attorney and court fees as well. The judge will decide how much you will get and typically the court is in favor of the plaintiff since they gave services and were not paid. It is looked upon as though the person who wrote the bad check was trying to steal. In all states other than Texas, the person will have the option to either pay or go to court. If living in Texas, you should not report the bad check to the city if you want to sue to the person for the money. It will not matter how much it is.


Most banks are sensitive to those receiving a bad check. Try talking with your bank and ask them what you can do in order avoid paying the fee for bounced checks. They may agree to have you open up a savings account, buy a CD, or require a certain amount in your checking account in order for them not to charge you every time you get a bad check. If you run a business this may be your best protection from those extra fees.