Published Friday, February 10, 2023 by Alan Holdren

Bad Checks are special items in the collection world as there are specific state statutes dealing with the penalties for writing one. In Indiana IC 26-2-7-4 thru 8 deal with these and I recommend you familiarize yourself when looking to an agency for help with these items in Indiana.

The approach to these seems to vary widely from one judge to another concerning what charges that will allow, such as allowing triple the face value up to $500, interest, court costs, reasonable attorney fees, travel Expenses for you to defend your position, labor Expense in filing the case, direct and indirect expenses incurred and (7) all other reasonable costs of collections. All of these fees seem to be well within the statute dealing with bad checks and asking a few questions will save you some time in court and put you in a favorable position with the courts if you have to do this yourself repeatedly. I have seen some $150 checks end up around $800 when it is all said and done. It is probably legal, but could be a tough amount to collect and a lot of paperwork to prove.

We have always used a return check fee (up to $27.50) currently, added to the balance to form a final bill due our client and charged a percentage of the total amount turned over for collection. I could understand that if a case is difficult that the long method be a way of serving notice that bad checks are dealt with swiftly and harshly as a deterrent to future bad check writing.

I believe the type of business and customers, along with the amounts owed must be considered when picking an aggressive method or more friendly method in adding charges to checks. Again please check with your local counsel and judges as to what are palatable by them, they will always have the final say no matter what your or my opinion is.