You deposited a check in your checking account and never thought about it again - until the notice from your bank that it hadn't cleared and you were being charged around $35 for the privilege of depositing a bad check. You want to know if you have any recourse, and the answer is yes.  You can sue in Small Claims Court. Continue reading below for more information on the process.

What is an NSF Check?

First, some terminology. An "NSF" check is what we classically call a "bounced" check.  It is returned because there are insufficient funds in the account it was written on to pay you the amount. Stop Payment checks are returned when the check writer tells the bank not to pay the check. For this one, the amount of money held in the account is irrelevant.  In either case, you have not received the money you were promised.

Before you go to court, the first step is to send a demand letter to the person who gave you the NSF or Stop Payment check. You will want to send it with proof of delivery, so certified mail or overnight courier with a signature required are your best bets. Be sure to keep your documents proving delivery. 

Demand letters can be challenging to write, so Dispute provides a broad selection of templates to help you draft your letter. Your letter should include the amount of the check, the bounced check fee, the cost of mailing the demand letter, and any other costs you've had to date. Be sure that you actually do demand that the check writer pays you. Once you've sent your letter, you generally need to allow the check writer at least 30 days to respond.

What Happens after a Demand Letter is Sent

Assuming the check writer doesn't dispute your version of the story but doesn't pay you, you can sue for the amount of the check and your costs for depositing the bad check (including those for your demand letter). The states vary in what you can do, what you can recover, and how payment can be made.  Be sure to check out the law in your state so that you ask for all the relief available to you.

As with bad check rules, the states have a wide variety of rules relating to Small Claims Court. These rules cover the maximum amount your suit can involve and the steps you have to file a lawsuit.  Once again, checking out your state and county rules is critical since violating them can dismiss your case.

The first step in filing a suit in Small Claims Court is to draft your complaint. Dispute offers a low-cost all-inclusive product for filing your claim, which may save you time and money. Using packet forms and guidelines like this can be very helpful when working with the courts for the first time.

After you draft your complaint, you must file it with the court and serve the defendant. Once again, you must consult your local county and state laws to determine how many copies to whom and what constitutes service in your state.  

After service and the defendant's answer, a process called discovery will take place. You each request and provide documents and sometimes testimony. And, you probably won't be surprised when I say, you should consult local rules to see what you can and cannot ask for. In any event, your documents for proving the bounced check should be submitted to the other side or included with your complaint.  

At any point in this process, your case may settle with a payment by the defendant.  Assuming that does not happen, you will go to a hearing, and the judge will issue a ruling shortly after that hearing. If the judge decides in your favor, but the defendant does not pay immediately, you may want to obtain a judgment ordering the defendant to pay.  You can then enforce this judgment.  

Taking the First Step in Your Lawsuit

If all of this work seems complicated or daunting, rest assured that it's easier than it initially seems. 2.7 million small claims court cases are filed annually in the US, which is only growing as more people realize how easy it is to enforce their legal rights in court.

Suing can be a complex and challenging process. It's essential to gather evidence and understand the legal process. If you believe that you have been the victim of this crime, don't hesitate to seek legal advice. By taking action, you can hold the company accountable for its actions and receive the compensation you deserve.