The California Statute of Limitations on NSF Checks

By Denise Sullivan
Make sure you have enough money to cover your checks to avoid NSF penalties.

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Checks become a legally binding agreement as soon as you sign your name. If there is not enough money in your account to cover the check, you will incur a fee from your bank and may also be prosecuted for fraud or sued by the payee. Each bad check you write starts its own statute of limitations. Once this time period expires, you cannot be prosecuted for the check.

Statute of Limitations

You are liable for the face value of the check for three years. The payee may bring an action against you in small claims court if the amount involved is less than $10,000. Your bank also has a three-year period to charge NSF fees for the bounced check. This three-year period runs concurrently with the statute of limitations related to the face value of the check.

Statutory Penalties

If the payee chooses to recover payment by suing you, you may be held liable for three times the face value of the check. There is a minimum of $100 and a maximum of $1,500 on the statutory penalty that can be applied. This limit only applies to the penalty amount, not the value of the check. Your bank may not charge additional NSF fees if a statutory penalty is levied against you.

Criminal Prosecution

In addition to these financial penalties, you may also be subject to prison time for fraud under Statute 476(a) of the California Penal Code. The prosecutor must prove that you knew your bank balance was low at the time you wrote the check. If the face value of the check was under $450, you may be charged with a misdemeanor and spend up to 12 months in county jail. Checks over $450 carry felony charges and up to three years in jail.

Making Restitution

You may be able to avoid statutory penalties by making restitution. The payee must send you notification of the bad check within 30 days of issuance. This notification must be sent via certified mail to start the 30 day restitution period. The payee must also declare his intention to file charges against you in small claims court if the check is not paid. You will then have 30 days to pay as much of your debt as possible. Partial payments reduce the face value of the check for future penalty calculations. You only will be released from liability when you have paid the full amount of the check plus any service charges or mailing costs.

About the Author

Denise Sullivan has been writing professionally for more than five years after a long career in business. She has been published on Yahoo! Voices and other publications. Her areas of expertise are business, law, gaming, home renovations, gardening, sports and exercise.

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