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Bounced checks happen. Maybe you got an unexpected delay in receiving your paycheck before you mailed out your rent payment. Or maybe you forgot that you sent a check for your niece’s birthday and double-dipped that same cash on another check to the electric company.
Here’s how you can recover from sending a bounced check and how to prevent bounced checks in the future.
Steps to take when your check bounces
Reach out to the person, business or organization that tried to cash your check. Whether your recipient was a friend, family member, roommate, landlord, utility company or anyone else that you want to pay, you should reach out to them as soon as you know your check bounced or is in danger of bouncing. This early communication should help mend any confusion or ill feelings that may arise, and you can get to work paying what you owe.
Cover the bounced payment amount. Perhaps your bounced check was an accident and you just need to move a bit of money around. If that’s the case, try to cover your payment as soon as possible.
If you don’t have the funds on hand, then talk to the recipient about the circumstances of your financial hardship. They might be able to help you by setting up a payment plan to cover your payment in installments.
Ask your bank if it can forgive your overdraft fee. If this is your first time bouncing a check, your bank might be more lenient about forgiving your nonsufficient funds or overdraft fee. If this has been a pattern of behavior, however, then your bank might become more stringent about requiring that you pay your overdraft or nonsufficient funds fee.
Pay your fee if it can’t be forgiven. If your bank isn’t budging on your returned check, nonsufficient funds or overdraft fee, then you may have to pay it in order to remain in good standing with your bank. Consider shopping around for a new bank with a lower overdraft fee.
Potential consequences of a bounced check
Repercussions for bouncing a check range from mild annoyances to civil or criminal action. Here are some of the potential outcomes when you bounce a check.
You may be charged a returned check fee, nonsufficient funds fee or overdraft fee. These fees are common at most banks. They can usually be upward of $30 or more per overdraft, and some banks charge this fee multiple times per day or charge you for having a continuous negative balance. Familiarize yourself with your bank’s overdraft policies so that you can know what you’re on the hook for in case of a bounced check or overdraft, as well as how you can avoid overdraft fees in the future.
You may deal with personal or professional fallout. Depending on your relationship with your check’s recipient, you may face some frustration or grudges as the result of a bounced check, which is why it’s important to let your recipient know the situation as soon as possible.
Your bank may report you to ChexSystems. ChexSystems is a reporting service that banks use to alert one another about customers who might not be responsible with their accounts, such as an ongoing issue with a customer not paying overdraft fees. It’s possible to clear your ChexSystems record, but a negative mark can stay on your record for up to five years.
You could face criminal or civil penalties. Depending on where you live, how much the check was for and whether you knowingly gave someone a bad check, you may be subject to federal or state criminal laws regarding bounced checks, some of which could even result in a felony charge. On a less extreme level, the recipient of the bounced check may try to sue you in civil court if the payment issue remains unresolved.
Tips to avoid bouncing a check in the future
Whether you made a one-time mistake or have a habit of bouncing checks, you’ll find that there are steps you can take to avoid bouncing checks in the future.
Sign up for overdraft protection, if available. Overdraft protection is a service that many banks offer that allows you to transfer money from a linked bank account to cover an overdraft. Some banks charge for this service while others provide it for free. If overdraft protection transfers aren’t available, your bank may have an overdraft line of credit, which is basically a way to borrow money to cover an overdraft. However, overdraft lines of credit can charge high interest rates, so make sure you use one only if you know you can pay it back quickly.
Consider sending a money order instead. If you get a money order from your bank, the bank will likely withdraw the funds from your account immediately, so you don’t have to worry about accidentally spending the money that’s supposed to go toward a check. Some bank accounts offer these services for free while others charge for them, and sometimes there are funding limits to how much you can put on a money order at once. Check with your bank to see if this option is available to you.
Use a payment app instead of a check. If you’re looking for a more immediate and convenient way to send money — as opposed to writing and mailing a check, then waiting for it to clear — consider looking into payment apps instead. Apps like Zelle, Venmo and Cash App allow you to send money quickly and without the hassle and delay of sending a check.