There may come a time when your checking account is low. Bills may be due, but your paycheck won't be issued for another few days. Should you still write a check? What if it bounces? Is it illegal to bounce a check? What if you have overdraft protection?
These are all incredibly important questions for anyone on a fixed budget. But the answers are unfortunately not very positive.
Bouncing a check is also known as writing a bad check. And bad check laws generally make the practice illegal.
A person commits check fraud when:
- Acting with the intent to defraud or deceive;
- He writes a check;
- Knowing that there are not sufficient funds; and
- That the check will not be honored when presented at a financial institution.
Some states also require that the writer receive some sort of benefit or property in exchange for the promised funds.
But what about post-dated checks and overdraft protection?
A post-dated check is generally acceptable so long as you reasonably believe you will have sufficient funds on the designated date. It also probably isn't illegal to bounce a check if it is somehow cashed prior to that date.
Overdraft protection is a bit trickier. Even if the check is still paid, bad check laws may still apply. This is especially true if the check was written knowing that there were no funds. Either way, you'll be stuck with hefty bank fees.
Now that you know that it is illegal to bounce a check, you should also be made aware of the punishment. Check fraud is often a felony, leading to jail time and fines. Many states also permit civil actions where a plaintiff can recover up to three times the amount of the original check.