In the state of Tennessee, a person who knowingly writes a bad check can face strict civil or even criminal consequences for doing so. The check writer may be liable for up to three times the check amount or face jail time if the check is over a certain amount.
The bad check law does not apply to post-dated checks, checks where the payee agrees to hold the check, or a lack of knowledge that check would not be honored as when the writer did not know they had insufficient funds when writing it.
Committing a Bad Check Offense
A person commits a crime when they write a bad check with fraudulent intent:
- For a monetary payment to pay a fee, fine, license, obligation or tax to a government entity, acquire credit, money, labor, services or any article of value, knowing they do not have the funds to cover the check.
- To stop payment on a check for a monetary payment to pay a fee, fine, license, obligation or tax to a government entity, to acquire credit, money, labor, services or any article of value, if the credit, goods, money or services were as represented at the time of the check’s issuance.
The law does not apply to post-dated checks or those in which the check holder knows or has reason to believe that the individual who wrote it did not have sufficient funds to ensure payment.
Penalties for Writing a Worthless Check in Tennessee
Per Tennessee Code Section 39-14-105, writing a bad check is theft. The criminal charge for knowingly writing a worthless check can be a misdemeanor or a felony, depending on the value of the property or service the returned check was written for. The charges are:
$1,000 or less
Class A misdemeanor
$1,000 - $2,500
Class E felony
$2,500 - $10,000
Class D felony
$10,000 - $60,000
Class C felony
$60,000 - $250,000
Class B felony
$250,000 or more
Class A felony
In a civil action, the person passing a bad check can be liable for:
- Amount of the dishonored check.
- Interest rate of 10 percent each year for the face amount of the check or the remaining unpaid balance from the date it was executed or until full payment is made.
- Any reasonable service charges incurred by the party the check was written to, including court costs incurred as a result of the civil action and attorney fees.
Collecting Payment on a Bad Check
A person who wishes to collect on a bad check can hire an attorney or do it on their own by sending written notice to the person that wrote the check. In the notice, they must state that they intend to ask the court for damages if fraud is found.
If the individual who wrote the bad check pays it in full within 10 days, the person trying to collect on it cannot proceed with the case in court. If there is no payment on the check within 30 days, the case can be filed in civil court and the person collecting on the check may collect three times the amount of the check (treble damages), but cannot collect more than $500 total.
Michelle Nati is an associate editor and writer who has reported on legal, criminal and government news for PasadenaNow.com and Complex Media. She holds a B.A. in Communications and English from Niagara University.