DEFINITION of 'Bad Check'

A bad check is a check drawn on a nonexistent account or on an account with insufficient funds to honor the check when presented. "Passing" a bad check is illegal, and the crime can range from a misdemeanor to a felony, depending on the amount involved and in which state it occurred.


When there are insufficient funds in an account, the bank will "bounce the check" (refuse to honor it). Banks and vendors frequently charge fees for bounced checks, sometimes exceeding the amount for which the check was written. Often, bad checks are written inadvertently by people who simply were unaware that their bank balances were too low. Online banking can help to avoid writing bad checks by allowing account holders to view their balance more frequently. Consumers can also create an overdraft account that is automatically debited if the primary checking account is too low to pay a specific check.

Bad Checks and the Law

The treatment of someone who tenders a check knowing that there are insufficient funds can vary by state. In some states there also must be an intent to defraud. In the majority of states the crime is considered a misdemeanor; if the check amount exceeds certain thresholds, the crime can be treated as a felony. Civil penalties apply in all cases, with a common penalty amount equivalent to the face value of the check, a multiple of the check amount with a cap, or the check amount plus court and attorney fees. Generally, a crime is not committed if a post-dated check is presented because the check is a promise to pay in the future. Whether there are insufficient funds at the time is irrelevant.

  1. Available Balance

    The available balance is the balance in checking or on-demand ...
  2. Negative Float

    The period of time between when a bank customer writes a check ...
  3. Check Hold

    A check hold denotes the maximum number of days that a bank can ...
  4. Automatic Transfer Service - ATS

    An automatic transfer service (or ATS) is a banking service which ...
  5. Check Representment

    A system wherein a check that bounced or did not clear when it ...
  6. Checking Account

    A checking account is a deposit account at a financial institution ...
Related Articles
  1. Investing

    A Guide to Bank Accounts

    Find out which type of bank account suits your specific needs.
  2. Managing Wealth

    Top Premium Checking Accounts of 2015

    Which banks offer the best deals for premium checking accounts – and what do you have to do to qualify for one?
  3. Personal Finance

    10 Checking Accounts the Ultra Rich Use

    These accounts – created specifically for the wealthy – come with special extras such as personal bankers, waived fees and the option of placing trades.
  4. Financial Advisor

    Is A Premium Checking Account Worth It?

    Premium checking accounts give you free checking and other perks in return for keeping a certain balance in the bank. Is that the best use of your money?
  5. Small Business

    How To Do a Background Check on Prospective Employees

    Discover why background checks can be extremely costly, tips for small businesses conducting checks on a budget and if professional checks can be avoided.
  6. Managing Wealth

    Checking Account Reviews: Chase Premium Platinum

    Which perks and services come with Premier Platinum and is it worth the cost to you?
  7. Personal Finance

    How to Write a Check

    Our simple step by step guide for How to Write a Check, for all of you who have never had to pay the old school way.
  8. Personal Finance

    The 8 Best Bank Perks

    Many banks are now offering free perks to entice new customers.
  9. Personal Finance

    5 Bank Fees You May Not Know About

    Banking regulations have recently changed and fees are following suit.
  1. How do you calculate payback period using Excel?

    Understand the various fees that can be assessed on a personal or business checking account, and learn methods to avoid being ... Read Answer >>
  2. When do checks expire?

    There is a legal grace period for cashing checks, but depositors and issuers may risk overdraft fees if a late check is presented ... Read Answer >>
  3. What are the differences between preference shares and bonds?

    Learn what information banks keep on file for their customers, and understand how this information can be used to deny an ... Read Answer >>
  4. What Are the Pros and Cons of Online Checking Accounts?

    Learn about the ways an online checking account can save you time and money, but understand the drawbacks before signing ... Read Answer >>
  5. Are checks escheatable?

    Learn that unpresented checks become unclaimed and escheatable by the state, when the state obtains and holds the title to ... Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center