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One hitch is that small claims courts have limited jurisdictions.
If you accepted a check from someone in another state, you may find
that you'll have to go to a higher court to sue.
"You could get a judgment in your state, but
now you have to bring that judgment to the person who wrote the
check. You have to take it to the state where that person is located
and get a court in that state to enter the judgment," says
Gerry Goldsholle, an attorney, former prosecutor and founder of
Advice Company.
"So, now the local sheriff or marshal exercises
attachment or levies powers against the person's property in that
state. But you'll have to pay sheriff's fees; now you're out a lot
of money."
And that's the rub: You could soon incur more costs
than the original debt. Somewhere along the line you may have to
decide whether it's worth continuing. If the amount owed is large
enough, you may want to consider hiring an attorney or a collection
agency to handle the situation for you.
Your local government may help
Another option, if you're lucky enough to have one in your area,
is a state or district attorney's check-recovery unit. These offices
vary in the depth of services they perform, but some are very aggressive
and take a huge amount of the workload off the victim's shoulders.
In Mobile, Ala., the Mobile County check-enforcement
unit operates out of the district attorney's office. Bad-check writers
are given a chance to settle up, but perpetrators who don't cooperate
could be arrested, according to spokeswoman Debra Powell.
"A lot of people don't make the distinction that
this is a crime. We tell them there's a warrant for their arrest
and give them five days to come in. We try to work with them as
long as we don't consider them a predator. But if they're evasive,
we'll go after them. We'll find them at work or dropping their kids
off at school."
Powell says the victim is expected to send a certified
letter to the check writer. If the check writer fails to respond,
the victim can come to the check recovery unit and start the process.
"We enter the check into our computer and create
a warrant and an affidavit. Then we take the victim and the paperwork
to a magistrate where the victim swears the claim is true and correct.
Everything is placed in a court file and we then send a letter to
the check writer. We give them five days to respond.
"If they come in, they have to pay the face amount
of the check plus a $30 fee to the victim. They also have to pay
us a $94 warrant fee. If they don't come in, we go after them. If
they're supposed to show up for any other court -- traffic court,
divorce court -- we're there waiting to arrest them."
Powell says her unit collected over $2 million in
the past year.
Limit the payment options
The obvious lesson in all of this is to not accept personal checks.
But for people dealing locally with one another or sometimes even
out of state, it understandably can be easier to use a check, but
it's not wiser.
A seller isn't likely to wait until the check clears
before taking delivery of the merchandise. John Hall of the ABA
says you can't call a bank and ask if there are adequate funds to
cover the check because privacy laws would prevent them from giving
you that information.
According to the ABA, only about 1 percent of all
checks bounce. But some 40 billion checks are written every year,
so that's about 400 million checks that bounce. You can lessen your
chance of becoming a victim and avoid the hassle and expense of
taking someone to court by requesting that buyers pay you by money
order, certified check or a money transfer by Western Union.
You could even use services such as PayPal and
Escrow.com, which are frequently employed by people who buy and
sell over the Internet. This is very much a situation where an ounce
of prevention is worth a pound of cure.
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