Here are the steps on how to collect on a bad check:
- Contact the check writer. The first step is to contact the check writer and try to resolve the issue informally. Explain that the check bounced and ask them to make payment in another form, such as cash or credit card.
- Send a demand letter. If the check writer does not respond to your initial contact, you can send them a demand letter. This letter should outline the details of the bounced check, including the amount due, the date the check was written, and the date it bounced. It should also state that you will take further action if the check is not paid within a certain period of time.
- File a police report. If the check writer still does not pay the check, you can file a police report. This will create a record of the incident and may help you if you decide to take legal action.
- File a civil lawsuit. If the police are unable to help you, you can file a civil lawsuit against the check writer. This will allow you to sue for the amount of the check plus any additional damages you may be entitled to.
- Place a lien on the check writer’s property. If you are unable to collect the money through legal action, you may be able to place a lien on the check writer’s property. This will allow you to collect the money once the property is sold.
- Report the check writer to a credit bureau. If the check writer does not pay the check, you can report them to a credit bureau. This will damage their credit score and make it more difficult for them to get loans or credit cards in the future.
It is important to note that the specific steps you need to take to collect on a bad check may vary depending on your location. You should consult with an attorney to get specific advice for your situation.
Here are some tips to help you avoid bad checks:
- Only accept checks from people you know and trust.
- Check the check writer’s ID.
- Look for the check writer’s bank’s routing number and account number.
- Call the check writer’s bank to verify that the check is good.
- Do not cash a check that is made out for more than the amount owed.
- Keep a copy of all checks you receive.
An experienced debt collection agency like New World Collections will do all these steps for you. In most cases, it is recommended that you work with a reputable collection agency when trying to recover a bad check.