Bad Check Laws In Colorado - What Happens if You Write a Bad Check in Colorado


Check fraud is considerably less of an issue these days with more and more people opting to pay with debit or credit cards. Of course, this is if businesses even accept personal checks anymore as it has become more and more popular to see that familiar signage, "We apologize but we are no longer accepting personal checks." However, Colorado laws are still in full effect when it comes to some potentially severe bad check penalties. If you have recently been accused of writing bad check or if you have been the recipient of a bad check, it is important that you act quickly to protect yourself.

State Of Colorado

Many people in Colorado are under the false impression that a company you hand a check over to must submit the check to you bank twice before contacting you directly for payment. This is actually not true. In the state of Colorado, a business needs only to submit your check one time to a bank before attempting to reach you directly.

Both civil and criminal penalties apply if you have written a check that has come back to a company as "insufficient funds". In addition to checks, these penalties also apply to drafts as well as orders that are unpaid at the time they are presented.

In fact, criminal and civil consequences can take place a check you have written was returned the business as insufficient. If you then do not pay the business you wrote the check to the full amount owed plus any associated penalty fees they may have incurred as a result within 15 days of being notified, you run the risk of being prosecuted.

Check Fraud: Civil Penalties

In addition to paying the business you owe the full amount of money to, you must also pay to them the insufficient funds fee that the bank has likely charged them for trying to cash the check. This is typically either $20 or 20% - whichever is greater- of the amount of the original check you wrote. Not to mention you likely incur charges as a result of the insufficient funds from your own bank. This means that on a single insufficient funds check you have written, you could likely owe nearly $100 in related fees to your bank, a collection agency, and the business you originally wrote the check to.

The collection agency now involved will require you to pay the amount you owe within fifteen days of the date that they mailed you a collection notice. This is not to be confused with the actual date that you receive the notice. You must look at the date written on the actual notice in order to stay within compliance. Sometimes this can mean you are left with only a few days' notice to make the payment. If you fail to pay, the agency can then take you to court and sue you for as much as three times the amount of the original check as well as all court costs and lawyer fees.

Checks Bounced From Employers

In the event that an employee receives a bad check from an employer, the Colorado Division of Labor is responsible for investigating any claims where an employee has not been adequately compensated for the work that they have performed.

However, if this has happened to you, the Colorado Division of Labor cannot recover the related expenses for you such as fees you may have incurred from receiving the bad check. Instead, you have the option of completing a formal document of dishonored instrument. This notifies the employer that you are demanding payment in full. Once they receive the notice, they could then be responsible for as much as three times the original amount you should have been paid if they do not pay within fifteen days. This is in addition to any court expenses, damages and any attorney fees as well.

Check Fraud: Criminal Penalties

If you make the choice to write a bad check and do not pay the necessary fines associated with the initial consequences, the penalties can be:

Misdemeanor: You can be imprisoned in a Colorado county jail for a minimum of three months and a maximum of one year. In addition you could be fined anywhere from $250 to $1000.

Felony: You also run the risk of being imprisoned in a state penitentiary for a minimum of five years. You could also receive a fine of anywhere from $1,000 to $15,000 in addition to this sentence. If this is your second conviction however, you could face imprisonment up to ten years and fines as much as $30,000.


It is important to understand that these laws actually do not apply if it turns out that the check was rejected due to your paycheck not clearing or bank error. Additionally, the laws pertaining to check fraud do not apply if you issue a “stop payment” for a check that was written items that you received that were damaged or defective.

Also, it is important to note that the definition of a check is defined by the Uniform Commercial Code as being a draft that is drawn on a bank that is payable on demand. Because of this, any post-dated check that you may have written is not considered a check that falls under these same laws. This is because most states in America consider a post-dated check to not be payable on demand and therefore not fraudulent or within the parameters of any bad check laws if the check does not happen to clear on the written date.

This is why you are able to take out a payday loan by writing a post-dated check without being obligated to pay the full amount on the day that you authorized the check to be cashed as a result of unforeseen reasons. As a result, the short-term loan company that you wrote the check for is unable to pursue any fraudulent charges against you. Instead, they are obligated to proceed under the usual debt collection process in order to obtain their money.

For further information on writing or passing a bad check and for civil and criminal penalties in other states under the laws of issuing bad checks, please read Bad Check Laws.

For the most current information on Colorado bad check laws, check your state statutes.

Find out how to Prevent Overdraft And Bounced Check Fees.
Learn about Fraudulent Checks And Withdrawals.