If a person pays you for goods or services with a check and that check is then dishonored by the bank on which it is written, you may be able to collect on the check by proceeding under the so-called South Carolina Bad Check law.
The law provides that it is unlawful for any person, with intent to defraud, to draw, make, issue or deliver to another a check when at the time of drawing, making, issuing or delivering such check, the person (“maker”) does not have an account in such bank, does not have sufficient funds to pay the check, or if the check has an incorrect or insufficient signature on it. This applies to checks used for the payment of money, whether given to pay rent, make payment on a lease, obtain money, services, credit or property of any kind, or anything of value, including an obligation or debt of state taxes.
It is important that you understand that not all checks that are dishonored come under this law. For the law to apply certain requirements must be met. First, the payment by check must be made at the same time that the goods or services are delivered. Second, the check must not have been postdated. Third, the maker of the check must not have given you any reason to believe that the check is no good, such as asking you to hold it for a few days. Fourth, you must have presented the check for payment within 10 days of receipt. And finally, you must have obtained the full name, home address and home telephone number of the maker at the time the check is given to you and you must show that you witnessed the maker's signature by initialing the check. It is important to note that checks more than 180 days old cannot be criminally prosecuted.
Remember that by proceeding under this law you may cause the arrest of a person, so it is important that you proceed correctly. If you don't, the person from whom you are trying to collect may have grounds to file a complaint against you.
Once you have determined that the check in question does come under the Bad Check law, you are required to send written notice to the maker of the check to the address printed or written on the check. This notice must be sent by certified mail and must include the check number, the date the check was written, the bank on which it was drawn, who the check was made payable to, and the amount of the check. You must give the reason why the bank refused payment and also advise the maker that payment of the check in full plus a $30.00 service charge must be made within ten days from the date the notice was mailed. You must advise the maker of the check that failure to make payment in full may result in you applying to the criminal court for prosecution under the Bad Check law.
If the check (including the service charge) is paid, that should end the matter. In the event that payment is not made you must decide whether to begin criminal proceedings against the maker of the bad check. You will have to give the magistrate evidence that you sent the proper notice ten days earlier in order to get a warrant. The law prohibits anyone from using the criminal process to collect a debt; prosecutions are instituted primarily to vindicate the rights of the public by punishing criminal conduct. So at this point you must be prepared to suffer the loss of the payment in exchange for seeking punishment of the person who gave you a bad check. However, if the maker of the check subsequently pays you after criminal charges have been filed but before a hearing has been held, you can drop the charge if you notify the court at least 24 hours before the court date that the matter has been resolved.
It is strongly suggested that you obtain an attorney to advise you whether you should proceed under the Bad Check law in order to collect on a bad check. Unless all requirements for using the law are met, you could be subjecting yourself to a lawsuit if the maker of the check is arrested and it is later determined that the matter should not have been brought under the Bad Check law.
This information was prepared to give you some general information on the law. It is not intended as legal advice about any particular problem. If you have questions about the law you should consult a lawyer. If you do not know a lawyer, you can call the South Carolina Bar Lawyer Referral Service weekdays between 9 a.m. and 5 p.m. The number is 799-7100 in Richland or Lexington Counties, and 1-800-868-2284 from other parts of the state.