If You Cash a Check and It Bounces, What Happens?

When a check is received and deposited, it is generally assumed that the funds will be available. However, a check can “bounce” when the bank cannot honor the payment, often because the check writer’s account lacks sufficient funds. This situation can arise from various reasons, including accidental oversight of account balances, a closed account, or a stop payment order.

Understanding the Immediate Impact

When a check you’ve deposited or cashed bounces, the first and most direct impact is the reversal of the provisional credit your bank initially granted. Your bank will deduct the amount of the bounced check from your account, effectively removing the funds that were temporarily made available. This reversal means the money you thought you had is no longer accessible, which can disrupt your financial planning.

In addition to the principal amount being debited, your bank will typically charge fees for processing the returned item. These are often called “returned deposit item fees” or “deposited item returned fees,” and can range from approximately $10 to $20. If the reversal causes your account balance to drop below zero, you might also incur overdraft fees or non-sufficient funds (NSF) fees from your bank, which can average around $34 to $35 per occurrence. These fees can quickly accumulate.

Your bank will usually notify you about a bounced check through various channels, such as a mailed notice or an alert through online banking. This notification typically includes details about the returned check and any associated fees charged to your account. The funds were never successfully collected from the check writer’s account in the first place.

Steps to Take After a Check Bounces

Upon learning that a check you deposited has bounced, gather all relevant documentation. This includes keeping the physical bounced check, any notices from your bank regarding the returned item, and records of any fees incurred. Maintaining a clear paper trail is beneficial for all subsequent communications and potential actions.

The next step is to contact the person who issued the check. Communicate politely and professionally to understand the reason for the bounced check and to request an alternative form of payment. This initial outreach can often resolve the issue, as the check writer may have simply made an oversight.

When requesting alternative payment, consider options that guarantee funds, such as cash, a money order, a cashier’s check, or an electronic transfer like an Automated Clearing House (ACH) payment. These methods ensure the funds are available and prevent a recurrence of the bounced check scenario. If the check writer indicates that funds are now available, you might consider redepositing the check, but proceed with caution, as another bounce could lead to additional fees for you.

If direct communication does not lead to a resolution, document all attempts to collect the payment. This includes dates and details of phone calls, emails, and any written correspondence. Sending a formal demand letter via certified mail, outlining the amount owed and any fees incurred, can serve as a strong indicator of your intent to pursue the matter.

If direct efforts fail, civil action, such as filing a claim in small claims court, can be an option to recover the amount owed plus any associated fees. Most states have provisions allowing individuals to pursue such claims, though specific procedures and monetary limits vary. This process typically involves filing a complaint, serving the check writer with notice, and presenting your case to a judge. Some jurisdictions may allow for the recovery of additional damages, such as multiple times the amount of the check.

Consequences for the Check Writer

For the person who wrote the bounced check, several repercussions can arise, beginning with fees imposed by their own bank. The most common charges include non-sufficient funds (NSF) fees, assessed when there are not enough funds in the account to cover the check, averaging $32 to $35 per returned item. If the bank honors the check despite insufficient funds, the check writer may instead incur an overdraft fee, which also averages approximately $35 per transaction.

Beyond immediate fees, writing a bounced check can negatively impact the check writer’s banking relationship. Repeated instances of bounced checks can lead to the bank freezing or even closing the account. Such account closures may be reported to specialized consumer reporting agencies, which can make it difficult for the individual to open new bank accounts for several years.

Civil liability is another consequence for the check writer. The individual remains legally obligated to pay the amount of the check to the recipient, along with any fees the recipient incurred from their bank due to the bounce. If the matter progresses to civil court, the check writer could be ordered to pay additional damages, which in some jurisdictions may include statutory penalties, such as two or three times the amount of the check, in addition to court costs and attorney fees.

In some situations, intentionally writing a bad check can also lead to criminal charges. While a single, accidental bounced check is usually a civil matter, writing a check knowing there are insufficient funds and with intent to defraud can be classified as a crime. The severity of criminal penalties varies by jurisdiction and typically depends on the amount of the check and whether there is a history of similar offenses. Charges can range from a misdemeanor, potentially involving fines and jail time, to a felony for larger amounts or repeat offenders, carrying more severe penalties, including substantial fines and prison sentences.