County of Los Angeles Department of Consumer Affairs Information Sheet

Bad Checks

Stop Payment and Non-Sufficient Funds

A bad check is a check the bank will not honor. There are two kinds of bad checks.

• Non-Sufficient Funds (NSF) checks: A check is NSF if there is not enough money in the account to pay it or the account is closed.
• Stop Payment checks: The person who wrote the check told the bank to stop payment. 

If you are given a bad check, you can sue for the amount of the check plus bank fees. You can also add damages to your claim.  

Before you sue for a bad check

If you only want to sue for the amount of the check plus bank fees, you can file a small claims case right away.

If you want to sue for the amount of the check plus damages, you must first send a demand letter to the person who gave you the bad check. 

If you send a demand letter and are paid the amount of the check and bank fees within 30 days, your claim is resolved. You can no longer file a lawsuit.

The Demand Letter

Your demand letter must request that you be paid the full amount of the check, any bank fees and the cost of mailing the demand. It also tells the person who gave you the bad check, that if they do not pay within 30 days of your mailing the demand letter, you can sue for the check plus damages.

Your demand letter must include legal wording that comes directly from the California Civil Code.   You will need to get a sample demand letter. To get a copy of the sample demand letter:

• Download the demand letter from our website.
• Call our advisors at (213) 974-9759 and have it faxed or mailed to you. 

You must send the demand letter by Certified Mail with Return Receipt Requested.  This proves that your letter was sent.

Calculating damages

If you send a demand letter but are not paid, you can sue for the amount of the check plus three (3) times that amount in damages. The least amount of damages you can ask for is $100 and the most is $1,500.

Here is an example of damages for a $400 check:

Add the damages to the original amount of the check:

How to sue

To begin your small claims case, you need to file a Plaintiff’s Claim with the court clerk.  (See How to Sue in Small Claims Court.)

Are damages always awarded?

Sometimes there are valid reasons for stopping payment on a check.  For example, if the goods or services paid for with the check were never delivered or were defective.  Stopping payment for this reason is called a good faith dispute.

If the person who wrote the check can prove that a good faith dispute exists, the Judge might not award any damages.

What should I bring to court?

Bring evidence to prove your claim, including:

• The bad check;
• A copy of the demand letter;
• The certified mail receipt; and
• Proof that a good faith dispute does not exist. 

Court forms are available here and at California Courts - Forms. Select "Small Claims" from the pull down menu. Forms are also available at the Court Clerk's office.

Contact us for more information or speak with one of our counselors at (800) 593-8222.  If you live outside of Southern California, call us at (213) 974-9759.

Updated March 1, 2008

For more information:
County of Los Angeles Department of Consumer Affairs
B-96 Kenneth Hahn Hall of Administration
500 W. Temple Street * Los Angeles, CA 90012-2706
Telephone (800) 593-8222 (within LA County)
web site: dca.lacounty.gov