By Sharon Frankenberg, Attorney at Law
As I discussed last week, you can pursue collection of a bad check through civil court or you can sometimes pursue criminal charges. Keep in mind the circumstances in which you may pursue criminal remedies on a bad check are much more limited than in civil court.
The worthless check statute may be found in the Tennessee Code Annotated, Section 39-14-121. For issuing or passing a worthless check to be a crime requires that it be done 1) with fraudulent intent or knowingly; 2) “for the purpose of paying any fee, fine tax, license or obligation to any governmental entity or for the purpose of obtaining money, services, labor, credit or any article of value”; 3) with the knowledge at the time that there are not sufficient funds in or on deposit with the bank for the payment in full of the check as well as other checks outstanding at the time of issuance. It is also a crime to knowingly or with fraudulent intent stop payment on a check for the payment of “any fee, fine, tax, license or obligation to any governmental entity or for the purpose of obtaining money, services, labor, credit or any article of value; provided that the money, credit, goods or services were as represented at the time of the issuance of the check.” Disputes about the value or quality of goods or services should be handled in the civil court rather than the criminal court.
It is important to note that criminal charges for worthless checks may not normally be brought relating to payments on an account, post-dated checks and checks where the holder knows or has good reason to know that the drawer has insufficient funds to cover the check. Also, this criminal statute does not cover prosecutions for worthless checks written on corporate accounts. Corporate checks that have been dishonored should be collected in civil court.
The procedure in Knox County to pursue criminal charges starts with your sending a written letter certified mail, return receipt requested, that the check has not been paid by the financial institution to the person who wrote you the check. You should give him or her ten (10) days to pay you the amount of the check. If you have not been paid within ten (10) days, you take a copy of your letter, a copy of the returned check from the bank and the green certified mail card or the letter which was refused to the General Sessions Court Clerk’s Office, Criminal Division on the Main Floor of the City-County Building. They will have you fill out a Worthless Check Application and pay a $10.00 fee. The District Attorney’s Office will send out another demand letter. If you have still not received your money after fifteen (15) days, you should bring your growing stack of paperwork and swear out a criminal warrant in front of a Judicial Commissioner. This is done on Tuesdays, Wednesdays and Thursdays from 2:30 – 4:30 p.m. in the Fourth Sessions Courtroom, Main Floor, City-County Building. After the criminal warrant is issued, it becomes a criminal matter and all further collection activity is handled by the courts.
Surrounding Tennessee counties have similar procedures with minor differences. For example, in Blount County after you have sent your certified letter, you can go to the General Sessions Court Clerk’s Office at the Justice Center and they can help you obtain a criminal warrant. Contact the clerk’s office in the county where you received the check to get the particulars. Obviously, this article does not cover every issue which might arise. You should always contact an attorney to get advice and assistance with your unique situation.