In North Carolina, as in most other states, it is illegal to knowingly write a bad check. Officially referred to as a “worthless check,” North Carolina law defines a worthless check as a check that is written from an account that does not have sufficient funds to cover the amount of the check. While accounting errors and accidents happen, the check writer’s knowledge and intent are what determines whether the worthless check is a mistake or a criminal offense.
Is it a worthless check?
- Was a check issued to you or by you to another person?
- Were there insufficient funds to cover the value of the check as written?
- Did the person who tendered the check as payment know at the time the check was written that there were insufficient funds or credit to cover it?
If the state of North Carolina can prove that the bad check was not an accident and that the check writer knew there was not enough money to cover the check, the state can win a criminal conviction. The severity of the conviction and penalties depend heavily on how much the worthless check was written for. A worthless check written for more than $2,000 is a Class I felony. If the check is written for less than $2,000, generally the crime is charged as a Class 2 misdemeanor; however, if the worthless check was written on a bank account that does not exist or an account that the issuer knew was closed, the charge could be elevated to a Class 1 misdemeanor. Likewise, repeat offenders will automatically face a Class 1 misdemeanor charge for their fourth offense.
In addition to considering how much the worthless check was written for, the penalties for a worthless check conviction also look at the defendant’s criminal record. Generally, the conviction of a first-time offender for a Class I felony would carry a fine and a few months of probation. However, a defendant with a criminal record could face up to one year in prison for their worthless check conviction in addition to the fine. Fine amounts are discretionary but can rise to $1,000 for a Class 2 misdemeanor conviction. Class 1 and Class 2 misdemeanor convictions may also lead to jail time, ranging from sixty to one hundred and twenty days, respectively. Further, in addition to jail time, probation, or fines, judges may also order the defendant in a worthless check case to tender the amount of the bad check to the victim, in addition to paying any applicable bank fees related to the rejected payment.
Though criminal charges are a common response for worthless checks, North Carolina law also gives victims the right to file a civil lawsuit against the person who wrote the bad check. Under state law, the victim may claim additional damages up to three times the value of the check, capped at five-hundred dollars per check plus recover any related bank service fees or processing fees. Generally, a criminal action is the most effective response to a worthless check, as recovering funds through a civil suit, especially against a habitual bad check writer, is likely to be a lengthy process without yielding much fruit for the labor.