What happens when your check bounces?


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Ever wonder what happens if your check bounces? 

Although checks might seem like relics of the past, many companies still use them, and so we must keep a box or two on hand. The problem is that the money we write out on checks doesn’t always leave our accounts right away, making them harder to track. 

This difficulty can mean a bounced check, which in turn can mean fees, frustration and worse. Read on to find out what really happens when you bounce a check.

Image Credit: depositphotos.com.

Your payment doesn’t get made.

You cut the check, you send the check, the check bounces. This doesn’t just mean that the payment doesn’t get made — it also means that you don’t have enough money in your account to try again. 

The only quick fix here is to deposit a paycheck or other funds into your account. Otherwise, you might have to pay the bill with a credit card or through other means (which could cost you even more money due to interest charges).

Image Credit: depositphotos.com.

You could be charged a fee by your bank and your payee

The company you were trying to pay with that check can charge a fee if it bounces. Your bank, however, can also charge you for bouncing a check. In other words, a bounced check could cost you twice.

Image Credit: depositphotos.com.

Your account could be reported to ChexSystems

You probably already know that you have a credit report, but did you know you might also have a debit report? There’s a consumer reporting agency called ChexSystems that operates under the auspice of the Fair Credit Reporting Act (FCRA). According to ChexSystems, the agency’s clients “regularly contribute information on closed checking and savings accounts,” and its services “primarily assist its clients in assessing the risk of opening new accounts.”

What that means for you is that negative events, like a bounced check, may put you on ChexSystems’ radar. If that happens multiple times, you may have a hard time opening a new checking account. Your checks can even be declined as you’re making a purchase.

Image Credit: depositphotos.com.

Unpaid, the account could end up in collections

Bouncing a check means that the account you were trying to make a payment on will go unpaid until you send a new check or pay another way. If this activity continues for too long, your account could end up in collections.

Image Credit: depositphotos.com.

You could end up in court if your checks bounce repeatedly

It may be difficult to imagine a bounced check landing you in court, but it can happen. This is especially true if you bounce checks regularly. 

Certified Financial Planner Justin Pritchard reported on The Balance that bounced checks can lead to a civil suit or criminal charges. The former can be a lawsuit from a payee seeking repayment, while the latter can be a result of “intentionally or habitually” writing checks that you know will bounce.

This article originally appeared on UpturnCredit.com and was syndicated by MediaFeed.org.

Image Credit: depositphotos.com.