The moment you get to know that the check that given to another person has bounced, there are certain steps that you have to take immediately to level the situation. Economic experts say for most customers, this happens once, in a while, there is no need to panic about that. However, the consequences will be severe for check bounces if it is not deliberate and check if bounces now and then. In the latter case, things become more serious.
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What are the reasons behind check bouncing?
It is definite that when a check is provided to a payee by the payor encrypting a certain date and the moment when that particular check hits the account, if that account does not carry enough funds against the check, instantly, the check will bounce. It may not be purposeful as the payer will have a notion that his account carries enough money against the check he is issuing. However, some other factors, such as automatic payment of your car loan or any different sort, have deducted the money in that particular account, and the check gets bounced. It becomes faster with electronic checks rather than paper checks. For paper checks, it will take time to reach the bank, whereas automatic checks usually get cashed faster, and hence it will bounce slowly.
How can we prevent checks from bouncing?
When you realize that there are not enough funds in the bank to clear the check, it will be better to deposit money to that particular account as soon as possible. Within no time, you can approach the bank’s branch and can deposit the cash. Another method is to contact the payee of the check, and if that particular person co-operates with you, and needs only the money instead of going for some legal actions, you can take back the check and hand over the same amount to him. This step should take before the check hits the bank. Even before somebody realizes that you have written a bad check, you can retrieve the check.
What happens if a check bounces?
If you fail to do all these activities before bouncing a check and suppose it has bounced, you should expect a sum as a fee against this. It is the truth that it may cost you a huge amount. Usually, it falls under $ 25 to $ 38, and some amount you have to pay to the payee as a part of compensation. When a check gets bounced, if your payee tries to deposit the checks once again and if the account does not carry enough money, another amount the fee can expect. You have to face legal implications if the payee goes for some actions against the payer regarding bounced checks.
How will this affect your credit score?
A bad check or two will not affect your credit scores in a much adverse manner. However, if you have a track of bad checks and issuing checks getting bounced, that will pull down your band score. It may further lead to another situation where you will be in a critical situation of unable to write checks.
Another problem will be regarding the opening of a new bank account as banks may usually reject this. If the issue of bad checks persists, there is a chance that your bank may close the existing account of yours in that bank, which is a serious issue.
However, if the check bounced was regarding loan repayment, it will immediately affect your credit score as a monthly payment of that particular loan is missed. Hence, it will pull down your credibility to a big extend. The scenario will be the same for late payments made and if one or two payments skipped.
What all legal consequences one has to face?
First and foremost, it is illegal to issue a check by knowing that your account will not carry enough amount, and the check will get bounced. Hence it is termed as a deliberate attempt. In that case, one has to pay a particular amount as a fine and face criminal charges. It is acceptable if a check is bounced coincidentally but is not all appreciate regarding deliberate check bounces. The total charges incurred may be much higher than the check amount, which will lead to a complete loss of money.
It is better to keep a buffer amount of money in the account if you are a person who writes check quite often. This extra amount can save you from bounced checks as by default, all the checks that hit the account will get cashed. It is better to check the balance of your account is very much easy now, as the technology is well developed. If you continuously make check bounces unknowingly, debit card payments will be a better option.