If I wrote a check to a payday loan companyfully intending to repay the loan and it bounced, can I be charged with check fraud?

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If I wrote a check to a payday loan companyfully intending to repay the loan and it bounced, can I be charged with check fraud?

After I got the loan my Mom died and then I lost my job. A law firm called me and offered a payment plan, which was pay them in 5 days or they would have no choice but to press charges against me for passing bad checks. I explained that I’m unemployed and live on welfare, and offered to send something to them every month. However they said if I didn’t contact them in 3 days with the full amount then a warrant would be served to me for my arrest. I told them that I didn’t write a bad check because I intended to repay the loan. They said the court wouldn’t see it that way. What should I do?

Asked on June 8, 2011 under Criminal Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You may have a cause of action against the law firm--they can't threaten to arrest you if you do not make payment in full because (1) it's not their call to make--they don't decide who is arrested or not (they can choose to *report* what they believe is a bad check passing incident ot the police, but they don't control what the police do); and (2) it's illegal to use threat of criminal action to collect a private debt. So they may themselves be acting unethically or possibly illegally.

Technically, if you had every intention to repay the loan but then couldn't owing to exigent circumstances (losing a job), you did not meet the criteria to have committed a crime, such as passing a bad check. That said, the issue is whether, if charges were filed against you and prosecution brought, could the state prove that you did in fact have the requisite criminal intention. Since the issue is intention at the time of the act, it comes down to what can be proven.

As to what you should do--you should, if possible, get legal help. If you can't afford it, try legal services or legal aid--they have units or departments, usually, to help indigent people beset by debt or collections issues. If they can't directly help, maybe they can refer you to some nonprofit orgnization which can. Other than that, if you can't repay now, you can't repay...document all your efforts to settle and you monetary situation as fully as possible, so you have the evidence for any litigation that may develop.


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