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mattnduke · Jan 23, 2007, 08:53 AM

I'm not sure if I'm posting in the correct section, but here goes.

I lent someone money with no written contract. They post dated a check to me for 30 days from the loan for the same amount I lent to them. When I went to cash the check 30 days later, I found out that the account was no longer active. The person now refuses to respond to me or pay me back. Is there any legal way of getting my money back? We have a mutual friend that knows of the situation and could be a witness that the money was lent and that the other person refuses to pay me.

Thanks!

Justice Matters · Jan 23, 2007, 09:40 AM

Perhaps the easiest types of claims to win in Small Claims Court are those based on NSF or returned cheques since the cheque answers the two main components that must be proven in any claim; who is liable and what are the damages.

The hardest part of your lawsuit is probably going to be collecting on your judgment.

You should consult with the Small Claims Court in your jurisdiction as to what collection remedies are available.

ScottGem · Jan 23, 2007, 09:53 AM

The loan has little to do with this. You have a check made out to you for an amount of money. In effect you have a contract where a payment has been promised. The reason the check was given to you has little bearing. I would, therefore, take this a step further. Passing a bad check is a CRIMINAL offense. I would send him a letter stating that, if he doesn't pay immediately, you will press charges against him. If he doesn't pay, go to the local DA and swear out a warrant against him.

mattnduke · Jan 23, 2007, 12:38 PM

Thanks for the help guys. When I found out that the checking account was no longer active, I never cashed the check. I still have it. Should I just go to my bank and cash it and then wait for it to be NSF, before going to the DA and pressing charges?

ScottGem · Jan 23, 2007, 01:29 PM

How did you find out the account was no longer active if you didn't attempt to deposit or cash it?

mattnduke · Jan 23, 2007, 01:51 PM

I went to cash the check that she wrote me at the bank where the check was written from. When I went to cash it, I was told that the account was no longer active.

ScottGem · Jan 23, 2007, 01:58 PM

Ahh, I would go back to the bank and get something wrriten to that effect. Then take the check with the letter to the DA.

Justice Matters · Jan 23, 2007, 02:46 PM

ScottGem is certainly right about passing off bad cheques being a criminal offence, however, will pressing charges against the debtor help or hinder your chances of recovery?

Can the charges be dropped if he pays? If not, and he is convicted, will the court order restitution? If the answer to both of these questions is "no" then you may want to stick with civil remedies only.

For your consideration, I generally advise people not to interfere with a debtor's ability to make money since it can end up hurting the creditor in the long run. A debtor who ends up spending money on a lawyer fighting criminal charges will have nothing to give you in the short-term and a debtor who can't get a job because of a criminal record may have nothing to offer you in the long-term.

mattnduke · Jan 23, 2007, 03:07 PM

I definitely appreciate the input, Justice. I completely see your point. But from your points, it sounds like I should just do nothing and hope the debtor pays. How would I approach this in a Civil manner, as you mentioned?

Justice Matters · Jan 23, 2007, 05:05 PM

If you are looking for a civil remedy you should get in touch with your local Small Claims Court. The rules and procedures of each jurisdiction's courts vary greatly so unless you are in Ontario where I am (and I suspect you are not) I cannot provide you with any specific information regarding the court system in your area. I can really only repeat what I mentioned before, and that is claims based on cheques are among the easiest to win.

Speaking generally about courts across North America, however, creditors who win their lawsuits are able to garnish the wages of a debtor, seize & sell their personal property and, if the information is lacking to do either, bring a debtor before the court for a judgment debtor examination.

Good luck.

ScottGem · Jan 23, 2007, 05:06 PM

I think you (and Justice) may have missed a point I made. I advised you to tell him to pay OR you will prosecute. Obviously you don't want to put him in jail where he won't be able to pay.

But Justice does make a good point about finding out whether you can withdraw the charges if he pays or whether the judge will order restituiton in lieu of jail. You can discuss this with someone in the DA's office. But the problems that Justice cites are the very things that may induce him to pay. Suing doesn't hurt as much.