When a Check Bounces: What the Law Says

What BP 22 Punishes

Batas Pambansa Blg. 22 (BP 22), the Bouncing Checks Law, punishes a person who writes or gives out a check to pay for something or to pay a debt, knowing at the time that they do not have enough money or credit in the bank, if the bank later dishonors (refuses to pay) the check. It also covers a person who had enough money when they gave the check but did not keep it there, so the check bounced when deposited within 90 days from its date.

A check that bounced because the issuer (the person who wrote it) told the bank to stop payment, without a valid reason, is treated the same way if it would have bounced anyway for lack of funds.

For a company check, the person who actually signed it is the one who can be held responsible.

The penalty in the law is 30 days to one year in jail, or a fine of up to double the amount of the check but not more than ₱200,000, or both, as the court decides.

The Written Notice and the Five Banking Days

BP 22 does not need proof that the issuer said, in words, that they knew the account was short. Instead, Section 2 says that if a check deposited within 90 days of its date bounces for lack of funds, that alone is prima facie evidence (enough proof unless the issuer shows otherwise) that the issuer knew.

That presumption (what the law assumes) does not apply if the issuer pays the holder (the person with the check) the full amount, or makes arrangements for full payment by the bank, within five banking days after receiving notice that the check was not paid.

This is why the notice matters so much. The Supreme Court has repeatedly held that the issuer must actually receive a written Notice of Dishonor (a notice that the check bounced), and that the person filing the case must prove they received it. A verbal reminder or a text message is risky. Send the notice in a way you can prove, such as registered mail with a return card, a courier with proof of delivery, or personal delivery with a signed receiving copy.

The bank also has a duty. When it refuses payment, it must state the reason in plain language on the check or on a slip attached to it, such as "drawn against insufficient funds" (DAIF) or "account closed".

Estafa With a Check

Article 315, paragraph 2(d), of the Revised Penal Code punishes estafa (swindling) done by postdating a check, or giving a check to pay what you owe, when the issuer has no money or not enough money in the bank. If the issuer does not deposit enough to cover the check within three days after the bank or the payee (the person the check was made out to) tells them it bounced, that is prima facie evidence (enough proof unless shown otherwise) of deceit.

The key difference from BP 22 is deceit (trickery). Estafa usually needs the check to have been the way the issuer got the money or property, such as paying with a bad check at the moment of a sale. A check issued to pay an old debt may fall under BP 22 but not estafa. The penalty for estafa depends on the amount involved and is generally heavier than BP 22. Which law applies to a particular check is a question for a lawyer.

Getting Your Money Back

A bounced check does not erase the debt. The issuer still owes the amount of the check, and a court can order them to pay it with interest.

Under the Rules of Court, a criminal case for BP 22 is deemed to include the civil action (the claim for the money) for the amount of the check, so the court can order the payment in the same case. You may also choose to collect the money only, without filing a criminal case. For amounts within the limit, small claims is a simpler court process that does not need a lawyer.

On penalties, the Supreme Court in Administrative Circular No. 12-2000 told judges that a fine, rather than jail, may be the better penalty for BP 22 when it fits the case. Administrative Circular No. 13-2001 made clear that this is a rule of preference (what courts should lean towards), and jail was not removed. The judge decides based on the facts, such as good faith, and a person who cannot pay a fine can be jailed instead (subsidiary imprisonment).

If You Received a Check That Bounced

1. Keep the check and the bank's return slip. Do not write on them. Note the date the bank returned the check and the reason.
2. Send a written Notice of Dishonor and demand. Tell the person who wrote the check that it bounced, the reason, and that they have five banking days from receipt to pay the full amount. Use registered mail with a return card or another method that gives proof of receipt. See Demand Letters and the Demand Letter template.
3. Keep the proof of receipt. The return card or signed copy is often the most important evidence in a BP 22 case.
4. If they pay, issue a receipt and return the check or note that it has been paid.
5. If they do not pay, you may file a complaint with the Office of the City or Provincial Prosecutor, or sue for the money. Settlement talks at the barangay (barangay conciliation) may be needed first for some disputes between people in the same city or municipality; see barangay conciliation. A lawyer can tell you which route fits.

Deposit postdated checks on or soon after their date. The BP 22 presumption covers checks deposited within 90 days of the date on the check.

If You Issued a Check That Bounced

• Act within five banking days of receiving the Notice of Dishonor. Pay the full amount of the check, or arrange with the bank for full payment, and get a written receipt that names the check.
• If you cannot pay in full, talk to the payee in writing and keep records of any agreement. A partial payment or promise does not by itself erase the presumption under BP 22.
• Do not ignore a subpoena or summons (an official order to appear or answer). If a complaint is filed, get a lawyer. The Public Attorney's Office helps people who qualify.
• Do not issue new checks you cannot cover to replace a bounced one.