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3 ways you can collect on a bad corporate check

On Behalf of | Feb 14, 2022 | Commercial Debt Collection

Usually, you can trust a corporate check written to your business. When that check turns out to have insufficient funds, however, you may wonder what you can do about it. Retail businesses have long dealt with bad checks from customers, which may not be worth pursuing if they are for a small amount. When your customer is another business, however, the amount at issue is probably significant. At Law Offices of Alan M. Cohen & Associates LLC, we help our clients collect on commercial debt, including bad checks. You do have options for collection. Here are three ways you can collect on insufficient funds.

Personal liability for a bad corporate check

Under Massachusetts law, you may sue anyone who has signed a check with insufficient funds, including the company named on the check. With smaller companies, the person signing the check is often one of the principals of the business. The person signing the check could face personal liability for the payment of that check, even if they never signed a personal guarantee. Their liability is limited to the dollar amount on the check. To pursue litigation, we start by sending the necessary written demand for payment and bring an action if they still have not paid after 30 days.

An ex parte bank attachment

Once we sue the debtor for the amount due, we have many methods of collection at our disposal. With bounced checks, we often use an ex parte bank attachment, also known as a trustee attachment. We can request that the court freeze the debtor’s bank accounts pending the outcome of the judgment hearing. This gives us direct access to the debtor’s money once we have our judgment in hand. We can also add the person who wrote the check to this attachment as an individual, combining both methods of collection.

Post-judgment attachments

The law provides a variety of pre-judgment attachments, in addition to the one mentioned above, but you can also pursue your money after you receive your judgment. With a judgment in hand, we can direct the sheriff to seize the debtor’s assets, including personal property and real estate, in a variety of ways. We analyze each case individually to determine the best course of action.

When you face a significant financial loss due to a bad corporate check, come to the attorneys with nearly 50 years of combined legal experience in commercial collections. Debt collection is our sole focus at Law Offices of Alan M. Cohen & Associates LLC, and we are ready to fight for you. Schedule an appointment by calling 508-763-6604 or reaching out online.