Bad Checks and NJ Bankruptcy Law

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Many people have bounced a check at some point in their lives. Life gets busy and plenty of Americans are living paycheck to paycheck. It’s all too easy to mistakenly pay a bill without significant money in your account. It happens. Most people, as soon as they discover their error, rush to fix the problem. Whether it means transferring money from your savings account or temporarily borrowing money from a friend, it’s in your best interest to make good on the bad check as soon as you possibly can.

Failure to fix an overdrawn bank account within ten days of being notified about the issue will lead authorities to believe that you knowingly wrote a check for more than was in your account. Writing a bad check in New Jersey is considered a misdemeanor. If the amount of the check was more than $200, you could even be charged with a felony.

Can filing for bankruptcy clear my bad check history?

The answer to this question is two-fold. In filing for bankruptcy, you will stop your creditors from being legally allowed to collect money from you. So, if you have written several bad checks and want to discharge the amount of the checks in your bankruptcy, you will almost certainly be able to do so.

However, given the fact that “bouncing” a check (especially while knowing you have no funds in your account) is punishable by NJ law – discharging the monetary value of your bad checks may be the least of your worries.

Many people file for bankruptcy for the protection offered by the automatic stay. The automatic stay prevents lenders from attempting to collect money from the debtor, and this includes any funds that were transferred via bad check.

That’s the good news.

The bad news is that filing for bankruptcy in New Jersey will never protect you regarding any criminal acts you have engaged in. The automatic stay was put into place to protect those people who were struggling financially. Anyone who has broken any laws will not be protected from prosecution by filing for bankruptcy.

Even if you are granted an automatic stay in your bankruptcy case, it will do nothing to halt or even slow down a criminal investigation against you for writing bad checks.

The bottom line is: If you have a history of writing checks that could not be paid, that debt is often considered dischargeable in a chapter 7 bankruptcy, depending on your answers to a set of questions about your intentions and financial situation at the time that you wrote the check(s).

However, you will never be able to discharge a criminal act. The bankruptcy system was set up to help people who are struggling financially, not to protect criminals. If you have written a bad check or even several bad checks by mistake or in poor judgement, you can still be charged with a crime and it is crucial that you seek legal counsel immediately.

 

Image credit: Michael
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