Iowa Bad Checks

Writing a bad check in Iowa can be a costly error that carries not only monetary implications, but legal problems as well.

When you write a check that is returned for insufficient funds, the person or business it was written two can submit it twice more. This gives you a chance to cover the amount of the check, but if you don't and the check is still not honored, the payee can pursue a civil action to recover the amount of the check and seek damages for three times the amount of the check up to a maximum of $500.00. For a bad check written for $100.00, you could end up paying $300.00. Three times the amount of the check may generally be awarded only if the creditor has complied with the written notice requirement under Section 554.3513 of the Iowa Code.

In order to seek recovery of three times damages, the creditor must have "...clearly and conspicuously posted a notice at the usual place of payment, or in a billing statement of the creditor, stating that civil damages pursuant to Section 554.3513 would be sought upon dishonorment". Thirty (30) days before a creditor begins a civil action to recover the damages on a bad check, he must send a written demand to the debtor either by personal service or by restricted certified mail, notifying the debtor that if the face amount of the dishonored check is not paid within thirty (30) days, three times damages would be sought.