Bounced/Dishonored Check Recovery
Creditors who are faced with bounced or dishonored checks have options to recover what they are owed. New Jersey law allows creditors to pursue claims against anyone who writes a bad check as long as a claim is filed within the time period set by the statute of limitations. In addition to money owed, you may be able to obtain attorney fees and court costs.
Statute of limitations for recovering a dishonored check
Under New Jersey law, a creditor who has received a dishonored check has three years from the date of dishonor or 10 years from the date the check was written, whichever is earlier, to initiate a civil proceeding against the person who wrote the check. An experienced collections lawyer can help you pursue your right to payment for a bad check in a timely manner.
How much are you entitled to collect on a bad check?
When collecting a debt resulting from a bad check, you can seek recovery of:
- Your attorneys’ fees
- Court fees
- Mailing fees for the notice
- Damages equal to $500, or triple the face amount of check, whichever is greater
Our goal is to help you recover the fullest amount of damages possible. Thus, when a customer or borrower writes a check on an account with insufficient funds, we pursue your legal remedies.
Why use an attorney instead of a collection agency?
New Jersey provides that you can pursue civil actions against an individual who writes checks with insufficient funds. Using an attorney, rather than a collection agency, is a vastly more effective way of collecting a judgment or debt. A collection agency cannot file a lawsuit to collect the sum owed to you from a bad check. A collections attorney at Snellings Law LLC, however, can file a lawsuit and seek recovery of your attorney’s fees and other collection-related expenses. This means that in addition to recovering the original debt owed to you from the check, you can hold the borrower liable to pay your legal fees incurred in pursuing this debt.
Advantages of a collections attorney over a collections agency
Collections attorneys cost less
This may sound counterintuitive, but if you receive a judgment against the writer of the bad check, you can recover your legal fees and other processing fees when recovering the value of the check. You also get three times the value of the check in the judgment.
Collections attorneys do more
A collections agency has no authority to represent you in a court of law. They cannot obtain a judgment against the debtor. All they do is harass the debtor over the telephone until they pay the debt. Meanwhile, the statute of limitations on your debt is ticking away. If it goes beyond 10 years, you will not be able to recover the money lost.
Collections attorneys operate faster
In New Jersey, you can issue a 35-day notice that a check has bounced and begin obtaining a judgment against the debtor immediately thereafter. Once you’ve obtained a judgment, the stakes get really high for the debtor. You can place liens on their real property, levy their bank accounts, or obtain writs of execution against their property. None of this is good. They generally attempt to settle the debt before you can do any of that.
I received a bad check; what should I do?
First things first, you’ll want to contact the customer or client who wrote the bad check and then inform them that their check has bounced. If that doesn’t work, you’ll need to write them a certified letter containing the following information:
- Name of the client/customer;
- Date the check was written; and
- Amount the check was written for.
You will also want to inform the client/customer that you will pursue the debt using any legal means necessary to recover the delinquent account if it is not paid within 35 days of the notice. You will find a template for these notices in the text of the NJ statutes. Once those 35 days have lapsed, remedies include filing a lawsuit and obtaining a judgment against them.
Knowingly writing a bad check is a jailable offense
Not only can you sue a company for writing a bad check, but the individual who wrote the check can be charged with a crime if they wrote the check knowing that there were insufficient funds. This is considered check fraud and, if the check was over $200, New Jersey law considers it an “indictable offense”. If the check is under $200, the individual can still be sentenced to six months in jail and fined $1000.
From there, the penalties get stiffer. If the check is between $1000 and $75,000, the individual can face 5 years in prison under NJ Rev Stat § 2C:21-5. If you want to pursue criminal charges against a client or customer for writing a bad check, Snellings Law LLC will speak to the district attorney. However, since criminal cases take precedence over civil cases, your suit will end up waiting until the criminal case is settled. We recommend using this tactic only as a last resort.
Collecting a debt across state lines
Most, but not all, states have adopted UEFJA (Uniform Enforcement of Foreign Judgments Act) which allows creditors to easily domesticate a judgment if your client does business in a different state.
If you obtain a judgment in New Jersey and your client owns assets in other states UEFJA streamlines the process by which you can lay claim to their assets. It’s simply a matter of filing that judgment with the appropriate clerk in that state. This makes it difficult for clients who pass bad checks to protect themselves across state lines.
Additionally, if you the court has granted you a judgment in another state, Snellings Law LLC can domesticate the judgment in New Jersey.
Contact a New Jersey debt collection law firm to help you recover a bounced check
The legal team at Snellings Law LLC uses every resource available to pursue your right to collect the debt owed under checks written with insufficient funds. Schedule your appointment with us today. Our office has available parking and access to public transportation, as well as flexible hours for appointments.
Have a question? Get in touch with us. We would be glad to hear from you.
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