Someone Wrote You a Bad Check in NC: Your Legal Options

Receiving a bad check is more common than most people realize. Sometimes it’s an oversight a quick phone call can fix. More often, though, the person didn’t have the funds, and one bounced check starts a landslide of debts coming due. If you’re holding a worthless check, you can find yourself at the bottom of the priority chain with little hope of seeing your money.

For a check worth a few hundred dollars, a demand letter from an attorney is usually as far as it’s worth taking. But what about the general contractor who collects a $30,000 check to pay his subcontractors, and it bounces? Now he’s covering payroll out of his own pocket and taking on a loan to do it, watching interest pile up on a debt that was never his. He can even face lawsuits of his own. 

When the amount is large enough to disrupt your business or your finances, you need to know how to recover it and how to become a priority for the person who wrote it. If you’ve received a bad check in North Carolina, here are your options.

What Is a Bad Check?

A bad check, sometimes called a worthless check, is a check that can’t be cashed when you present it to the bank. Usually that’s because the account doesn’t have enough money in it, but it can also happen when the account has been closed or never existed in the first place.

North Carolina law gives the victim of a worthless check two main options: a civil lawsuit or criminal charges.

Option 1: Civil Litigation for a Bad Check

The first option is to bring a civil lawsuit. Depending on the size of the check, that could mean small claims court, district court, or superior court.

North Carolina lets you recover more than just the face value of the check. Under N.C. General Statute 6-21.3, if you notify the check writer in writing and give them 30 days to respond, you can seek damages of up to three times the amount of the check, capped at $500 per check. You can also recover any bank service fee under N.C.G.S. 6-21.3 and a processing fee under N.C.G.S. 25-3-506.

A civil suit can be effective, but it depends on the circumstances, including the amount of the check and who wrote it. The downside is time and collectability. You can wait months for a hearing, and even a judgment in your favor is no guarantee you’ll collect. The person who habitually writes bad checks is often the same person with multiple judgments already against them and few assets to go after.

Option 2: Criminal Charges for a Bad Check

The second option is pursuing criminal charges. Under N.C.G.S. 14-107, writing a worthless check is a Class I felony when the amount is more than $2,000. A Class I felony in North Carolina can carry up to 12 months of incarceration.

For smaller amounts, the charge is a misdemeanor. A check of $2,000 or less is generally a Class 3 misdemeanor for a first offense. Two situations raise the stakes regardless of the dollar amount: a check written on an account that has been closed, or one written on an account that never existed, is a Class 1 misdemeanor. Repeat offenders face steeper penalties as well.

Criminal charges can be an effective way to recover your money, because few people want a warrant sworn out for their arrest. In many cases the charges are dismissed once the amount owed is paid. But the process has to be handled carefully. If you do it wrong, you can end up on the wrong side of the law yourself.

North Carolina requires specific steps before a worthless check warrant can be issued. In Mecklenburg County, the magistrate’s current requirements are laid out on the Mecklenburg County Sheriff’s Office Courts page under “Worthless Check Warrant.” In short: you send a certified letter demanding payment in full within 10 days, then wait 15 days before applying for a warrant. The check has to be stamped by the bank as “Insufficient Funds” or “Account Closed.” If it’s stamped “Stop Payment,” criminal charges aren’t available and you’ll need to pursue a civil action instead.

The sheriff’s page is helpful, but it doesn’t list everything the law requires, and the paperwork has to be exact. It’s best to speak with a North Carolina attorney who has handled these cases before. Once you’ve waited the required period, you file a report, a detective reviews your documents, and if the district attorney’s office finds the evidence sufficient, a warrant can be issued (a felony warrant if the amount is over $2,000).

Which Option Makes Sense for You?

Neither route guarantees you’ll see your money overnight, and often the right answer is to keep both on the table. The civil path is what gets you a judgment and the extra damages. The criminal path is what tends to get a check writer’s attention. Which one you lead with depends on the size of the check, how the bank stamped it, and what you know about the person who wrote it.

That’s the part worth getting right before you act. A misstep on the criminal side can expose you to liability, and a poorly documented civil claim can cost you the enhanced damages you’re entitled to.

Talk to a Charlotte Attorney About Recovering Your Bad Check

If your business or your finances have taken a hit from a worthless check, Dozier Miller Law Group can help you weigh your options and put you in the best position to actually get paid. Call us at 704-372-6373 or schedule a consultation to speak with one of our attorneys about the specifics of your situation.

Frequently Asked Questions