Bad check: understand your complications
Bad check is when a payment order is issued and, at the time of withdrawal, the account does not have the specified amount. In this way, it becomes impossible for the creditor to receive the money.
The issuer will suffer a series of legal consequences, such as being included in the Registry of Issuers of Checks without Funds (CCF). Find out below why you shouldn’t issue this type of check and what are the measures if you have received one.
What is a bad check?
The check is conceptualized as a payment order which is worth exactly the amount described. In situations in which the issuer does not have this amount in the account, the check is considered bad.
The first time a check is classified as “bad”, it is included in reason 11 of this report and may be resubmitted in future opportunities. However, if the same check is considered bad for the 2nd time, then it falls under reason 12, the name of the issuer is forwarded to the CCF, in addition to being prohibited from issuing new checks.
The main reasons given in the CCF, in addition to those given above, are:
Reason 13: Account Closed;
Reason 14: Spurious Practice.
What to do when receiving a bad check?
In addition to the financial institution, there are two main parties interested in this situation:The issuer (who issues) and the creditor (who receives).
Therefore, here are some recommendations for those involved
When the check is classified as “bad”, the bank returns it to the creditor with a stamp on the back, which specifies the reason for the return. The creditor should contact the issuer and understand the situation. If there is no agreement, the creditor has the right to sue the issuer for the crime of embezzlement.
Therefore, it is the duty of the issuer to handle the situation correctly and resolve it, since, otherwise, it will have to answer for its actions in court.
It is important to remember that the situation does not always qualify as illegal, since the issuer may have written the check at times when he had the value. However, regardless of the reason, the issuer has the responsibility to pay the specified amount.
The responsibility for charging the issuer is with the creditor, not with the financial institution. If collection measures are unsuccessful, the creditor has the right to take legal action.
Anyway, there is no need to despair about the situation. Take the legal and possible steps and you will be rewarded the check amount eventually.
Is it possible to expire?
Expired debt is one that has exceeded the term, which is usually 5 years. However, the bad check debt has a shorter collection period, of only 6 months. If payment is not made within this period, it is possible to file a collection or monitoring action in court, and for these cases, the deadline is 5 years.
However, do not forget that when a debt prescribes (correct term for “lapse”), it does not mean that it is settled.
Is it a crime to write a bad check?
Issuing bad checks can be considered a crime of embezzlement, which has a malicious nature, that is, when there is an intention to commit an illicit act. However, the final sentence is determined only by justice, if the case is taken to the judiciary.
In addition, when issuing the check it is understood that the issuer will be able to pay the specified amount. Thus, if it is considered without a fund, the action can be classified as illegal, since the issuer would already know in advance that it would not have the value.
In any case, make sure you can afford the promised amount before issuing checks to avoid legal consequences.
How can I remove my name from the CCF?
Each financial institution has specific internal procedures, however the standard procedure to remove your name from the database of bad check issuers is to go to your bank branch and take the following documents:
- Account statement showing the payment made.
- Original check that led to the inclusion of your name in the CCF.
- Declaration of discharge issued and signed by the beneficiary of the check, duly identified and notarized by a notary or certified by the bank of the beneficiary of the check + negative certificates (obtain a negative certificate at each notary in the city of who issued the check or at the distributing notary) + microfilming of the check.
- Statement issued by the CDL (Câmara dos Dirigentes Lojajistas), accompanied by a document signed between the CDL and the payee of the check, attesting that the check was paid (these documents must be picked up at the CDL in your city) + clearance certificates + microfilming of the check.
- Once this is done, your name will be withdrawn within 5 working days.
It is important to point out that in cases of theft or loss, there is no record of your name in the CCF if the police report is delivered to the bank branch before clearing the check.
Issuing bad checks is a very serious action, and whoever issues it must bear the consequences of this action. So always make sure you have the amount before issuing any check.
And do not despair if you receive a bad check, as you will eventually receive the amount, as it is your right.