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What Happens if You Cash a Bad Check?

What Happens if You Cash a Bad Check?
Susan Guillory
Susan GuilloryUpdated July 27, 2023
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If you cash a bad check, you first and foremost have to pay the bank back. You also might owe a fee for trying to cash a bad check, known as a returned check fee.Whether you wrote a check recently and forgot to account for that expense in your bank account or someone wrote you a check and didn’t have the funds to cover it, you need to handle the situation right away. Here, we’re exploring what happens when you write a bad check, if checks go bad after a certain period of time, how to resolve a bad check, and more.

How Do Checks Go Bad?

Just like a banana that’s been sitting on the counter for too long, checks can also go bad.While it may vary from one bank to another, banks are only legally required to honor checks for up to six months. That means if your nephew sits on that birthday check you sent him a year ago and then tries to cash it, it might not go through.If you get a tax refund from the federal government, that check is good for one year, so don’t wait too long to deposit or cash it.What happens if you try to cash an old check? You or the issuer of the check might be charged a “deposit item returned” fee. For you, that fee might be $12-$15 or more. If the issuer of the check doesn’t have sufficient funds in their account to cover the check debit, they may be charged an overdraft or insufficient funds fee.Recommended: What Checking Accounts Are and How They Work

Spotting a Bad Check

Another situation to watch out for is when someone gives you a fake check. This is a common enough occurrence that many businesses don’t accept checks.If you receive a check from someone you don’t know, examine it carefully. Is it from a recognized bank? Is there a check number on it? Does it otherwise look legitimate?Many banks include security features on checks so you know they’re not fake. These can include security screens, raised printing, and the words “original document” on the back.You can also call the issuing bank to verify that there are adequate funds in the person’s account. Do this before you try to deposit or cash the check to avoid potential fees if it is a bad check.And finally, you can opt not to accept checks. There are so many other forms of payment available, including cash, debit and credit cards, and mobile payments like Venmo, Zelle, and Paypal, that checks have become nearly extinct anyway.

What Happens if Someone Writes You a Bad Check?

Maybe you tried to cash or deposit a bad check that someone wrote you. What happens next?Banks have different processing times for checks. It may take just a few days up to a few weeks to discover that a check is bad. If a check is found to be bad, the bank will reverse the deposit. If you don’t have the funds in your account, you may be charged an insufficient funds fee.If you deposit several bad checks over time, your bank may flag your account for further investigation and may even freeze activity or close the account.Recommended: How to Cash a Check Without a Bank Account

What Happens When You Write a Bad Check?

If you write a check from a money market account or checking account and it bounces, there may be consequences. You may be charged a fee by your bank, and you may also be held responsible for fees that the person you wrote the check to had to pay to their bank.Certainly, you may not have written a bad check on purpose, but know that there may be legal consequences of writing a bad check, as it’s a misdemeanor or felony in many states.

Is It a Crime To Write or Cash a Bad Check?

Though it might not have been a deliberate action to write a bad check, realize there may be serious legal consequences. Each state has its own laws about bad checks. In some states, it’s a crime that results in jail time and/or fees. In others, it’s a civil issue and you may be charged fees and have a negative report on your financial record.

Resolving a Bad Check

If you try to cash or deposit a check and it comes back as bad, your first step is to reach out to the person who wrote the check and try to resolve the situation. Get payment for the check amount, as well as any fees you were charged, if possible.You can also call the bank. There is the chance that the issuer of the check had deposited funds that didn’t align with when you deposited their check, so the bank may be able to process the check again with success the second time.If that doesn’t work, contact your local police. You can also hire a collection agency, who will pursue the check issuer to get your money (minus a fee).If you wrote a bad check, put enough money into your checking account to cover the debit as soon as possible. There are financial databases, including ChexSystems and Telecheck, that report bad checks. If you have more than a few bad checks on your record, you may find it difficult to open a bank account.

Tips to Avoid Bad Checks

It is entirely possible to avoid writing bad checks. Here are three ways in which you can avoid writing and cashing bad checks.

Have a Backup Account

It’s always smart to have an emergency fund savings account for many reasons, but in this case, you have a pool of money in the event that you accidentally write a check and don’t have enough to cover it in your checking account.Many banks allow you to overdraw from a savings account, meaning if you don’t have sufficient funds in your checking account, the remaining balance will be debited from your savings account. This helps you avoid overdraft fees and bad checks.

Pay Attention to Joint Finances

If you have a joint checking account, be sure to use software to track all expenses that both of you make, especially checks. It’s all too easy for one person to write a check and forget to tell their partner, thus making the likelihood of an overdraft all the more likely.

Watch Out for Automatic Payments

If you have automatic payments for things like your Netflix subscription or gym membership, you may not be thinking about those debits coming out of your account when you write a check. If your bank account balance stays low, you might want to stop automatic payments so you don’t risk writing a check when you can’t cover the balance.Recommended: Is It Possible to Write a Check From a Savings Account?

The Takeaway

If you cash a bad check, you should work to resolve the problem right away. Contact the person who wrote the check and call the bank to let them know what happened. This could potentially help avoid any fees or other consequences. To avoid writing a bad check, have a backup account, pay attention to joint finances, and be aware of automatic payments. It’s also a good idea to keep a “cushion” in your checking account to prevent any checks you write from bouncing.You also may want to link your checking and savings accounts. By doing this, money will come out of savings if your checking account is overdrawn. You typically are charged a fee when this happens, though, so proceed with caution.Lantern can help you compare savings accounts that earn a high interest rate.Explore high-yield savings accounts with Lantern by SoFi today!

Frequently Asked Questions

What happens if someone writes me a bad check and I deposit it?
What is the penalty for cashing a fake check?
Who gets charged for bounced checks?
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About the Author

Susan Guillory

Susan Guillory

Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.
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