Bad Check Law



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Bad Check Law

Colorado law imposes significant penalties on bounced checks so it is important that you read all collection letters and act quickly. A business does not have to run a bounced check through your bank account twice and does not have to contact you directly for payment. You must pay the check amount, plus $20 if the business posted or contracted for an NSF fee, and the greater of $20 or 20% of the check amount as collection costs. This is in addition to your own bank charges.

On a $50 NSF check, you could owe a total of $90 - the $50 check, $20 to the business, and $20 to the collection agency. The collection agency must receive your payment of the total amount due no later than 15 days from the date the collection agency mailed you its collection notice (not from the date you received the letter). This may leave you only a few days to pay the full amount due. If you miss the 15 day deadline, the collection agency may sue you in court for 3 times the check amount plus attorneys fees and court costs. This usually adds at least $200 to the debt. A $50 NSF check could then cost $350 or more.

The bad check law may not apply if your check bounced because your paycheck did not clear or your bank made an error. In addition, if you stop payment on a check because goods you bought are defective, the bad check law is inapplicable.


The preceding information can also be found on the Colorado Collection Agency Board's Website @

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Copyright 2005 Universal Partners Inc.
Last modified: May 05, 2005