Understanding Outstanding Checks: Texas Law And You

In Texas, a check is no longer valid if it is presented more than six months after its date. However, Texas Business and Commerce Code §4.404 does allow a bank to honour a check after six months in good faith. A check is considered 'bad' if the issuer does not have sufficient funds to cover the payment in full. Issuing a bad check is generally considered a Class C misdemeanor, punishable by a fine of up to $500.

Texas law on presumption of knowledge of insufficient funds

In Texas, a person commits an offence if they issue or pass a check or similar sight order for the payment of money, knowing that they do not have sufficient funds in their account to cover the payment in full.

The Texas Penal Code states that the issuer's knowledge of insufficient funds is presumed if:

• They had no account with the bank or other drawee at the time the check or order was issued.
• Payment was refused by the bank or drawee for lack of funds or insufficient funds on presentation within 30 days after issue, and the issuer failed to pay the holder in full within 10 days after receiving notice of that refusal.

The issuer must be given notice of the refusal of payment, which can be done via first-class mail or registered or certified mail with a return receipt requested. This notice must be addressed to the issuer at the address shown on the check or the records of the bank or drawee, among other locations.

The notice must contain the following statement:

> "This is a demand for payment in full for a check or order not paid because of a lack of funds or insufficient funds. If you fail to make payment in full within 10 days after the date of receipt of this notice, the failure to pay creates a presumption for committing an offense, and this matter may be referred for criminal prosecution."

If written notice is given, it is presumed that the issuer received the notice no later than five days after it was sent.

Prosecution's burden of proof of knowledge

Prosecutions Burden of Proof of Knowledge

In Texas, the burden of proof in criminal cases is "beyond a reasonable doubt". This means that the prosecution must provide evidence that eliminates any reasonable doubts about the facts of the case. For example, in a murder case, it is reasonable to question whether a person pulled the trigger, and so the prosecutor must provide evidence that proves that they did. It would not be reasonable to question whether an alien committed the murder.

In the US, the burden of proof in criminal cases is on the prosecutor, and the defendant is presumed innocent. This presumption of innocence means that:

• With respect to the critical facts of a case, the defendant has no burden of proof whatsoever.
• The state must prove the critical facts of the case to the appropriate level of certainty.
• The jury is not to draw any inferences adverse to the defendant from the fact that they are facing charges.

In Texas, the burden of proof in family law cases is "clear and convincing evidence". This means that the person must show the truth of a fact or matter in controversy with 'reasonable certainty', or in a way that creates a 'firm belief'. This is a higher burden than "preponderance of the evidence" but not as high as "beyond a reasonable doubt".

In family law matters, if one party is asking the judge for something, it is their responsibility to provide the court with the evidence required to make that order. For example, if a husband is asking the judge to order his wife to turn over certain documents, it is his burden to show the judge why the documents are relevant, that his wife likely has them, and that he has tried to get them but she has refused.

Adultery in Texas must be proven by clear and convincing evidence. Suggestion and innuendo are not sufficient—there must be more evidence than "I think he's having sex with her". However, a finding of adultery can be based on circumstantial evidence—you don't have to catch your spouse "in the act".

In the US, the burden of proof is usually on the person who brings a claim in a dispute. In civil suits, for example, the plaintiff bears the burden of proof that the defendant's action or inaction caused them injury, and the defendant bears the burden of proving an affirmative defense.

Issuing bad checks as a misdemeanour

In Texas, issuing a bad check or similar sight order is considered a Class C misdemeanour, which is punishable by a fine of up to $500. This crime is committed when a person issues or passes a check or similar sight order for the payment of money, knowing that they do not have sufficient funds in their account to cover the payment in full. The prosecution must prove beyond a reasonable doubt that the issuer had knowledge of the insufficient funds to convict.

It is presumed that the issuer intentionally issued a bad check if they had no account with the bank at the time the check was issued, or if the payment was refused by the bank for insufficient funds within 30 days of the check being issued. For the issuer to be charged with a crime, they must not have paid the holder after 10 days of receiving notice of the refusal.

The notice of refusal must be sent by first-class mail, registered or certified mail with a return receipt, or by telegram with a report of delivery requested. The notice must be sent to the address shown on the check, the address on the bank's records, or the address on the records of the person to whom the check was given. Additionally, the notice must contain a specific statement demanding payment in full within 10 days and informing the recipient that failure to pay may result in criminal prosecution.

Issuing a bad check is a serious offence in Texas, and offenders may face significant penalties, including fines and even jail time. Therefore, it is essential to seek legal advice and representation if charged with this crime.

Consequences of bad check crimes

In Texas, writing a bad check is a crime. Texas Penal Code §32.41 states that it is an offense for a person to issue or pass a check knowing that they do not have sufficient funds in their account to cover the check and any other checks that were also outstanding at the time. The law presumes that the person knew that the check was bad if they had no account with the bank at the time of issuing the check, or if they failed to pay the check within ten days of receiving notice that the check was returned for "insufficient funds."

The consequences of bad check crimes in Texas can vary depending on the specific circumstances and the amount of the check. Here are some possible consequences:

• Arrest: The police have the right to arrest individuals if they believe that they wrote a check knowing that there were insufficient funds in their account.
• Criminal Charges: Bad check crimes can result in criminal charges, including misdemeanor or felony charges depending on the amount involved.
• Fines: A conviction for issuance of a bad check is typically punished as a Class C misdemeanor, with a maximum fine of up to $500 under Texas state law. However, if the bad check was for child support, it is punished as a Class B misdemeanor, with a maximum fine of up to $2,000.
• Jail Time: In addition to fines, a Class B misdemeanor conviction for a bad check issued for child support can result in jail time of up to 180 days.
• Restitution: Individuals who receive bad checks can seek restitution for the amount owed. This can be done through a plea deal or by filing a civil lawsuit.
• Probation: Texas law allows for probation in bad check cases, and judges are also permitted to accept deferred adjudication plea deals.
• Community Service: In some cases, individuals may be offered the opportunity to complete community service in lieu of paying a fine or serving jail time.
• License Suspension: Writing a bad check can result in the suspension of certain licenses, such as a driver's license.
• Warrants: Failing to address a bad check or appear in court can result in a warrant being issued for the individual's arrest.
• Increased Fees: If a bad check is sent through the automated clearing process multiple times and is returned for insufficient funds each time, the bank may charge increased fees.

Check fraud and ChexSystems

ChexSystems is a consumer reporting agency under the Fair Credit Reporting Act (FCRA) that maintains a database of information related to consumer banking activity. It was founded in 1971 and is owned by the eFunds subsidiary of Fidelity National Information Services, Inc. (FNIS). ChexSystems collects and maintains data on banking accounts, including checking and savings accounts, and reports that information to its member financial institutions. This includes tracking information about consumers who have had issues with their accounts, such as overdrafts, bounced checks, and account closures. Banks use this information to help determine whether to approve a new account application.

In Texas, check fraud is a serious issue that can result in criminal charges. While there is no specific timeframe for when a check becomes outstanding, there are some important considerations to keep in mind. According to Texas law, a bank is under no obligation to pay a check presented more than six months after its date. However, Texas Business & Commerce Code §4.404 allows a bank to honour a check after six months in good faith.

If you suspect check fraud or have been a victim of check fraud in Texas, there are several steps you can take:

• Contact the three major credit bureaus (Equifax, TransUnion, and Experian) and request a fraud alert be placed on your credit file.
• Notify the bank of the stolen checks or check card.
• File a police report.
• Contact the Social Security Administration if your Social Security number has been compromised.
• Reach out to the Federal Trade Commission to download an ID Theft Affidavit.
• Review your check and bank screening reports and dispute any inaccuracies.
• Take advantage of ChexSystems' dispute resolution assistance if you believe your banking information is inaccurate or incomplete.

Additionally, ChexSystems provides financial education resources and tools to help consumers understand and manage their banking history, including online resources, webinars, and other educational materials.

It's important to note that ChexSystems is not a collection agency and will never attempt to collect money from consumers. However, it is a valuable tool for banks and credit unions to mitigate the risk of check fraud and make informed decisions about account approvals.

Frequently asked questions