Alabama Dishonored Check Law

Debts and Credit – Bad Checks – Alabama

Note: This summary is not intended to be an all inclusive summary of the law of bad checks, but does contain basic and other provisions.


TITLE 13A: Criminal Code
CHAPTER 9: Forgery and Fraudulent Practices
(ARTICLE 1: Forgery and Related Offenses)

§ 13A-9-13.1. Negotiating worthless negotiable instrument – Generally.

(a) A person commits the crime of negotiating a worthless negotiable instrument if the person negotiates or delivers a negotiable instrument for a thing of value and with the intent, knowledge, or expectation that it will not be honored by the drawee.

(b) For the purposes of this section, it is prima facie evidence that the maker or drawer intended, knew or expected that the instrument would not be honored in any of the following instances:

(1) The maker or drawer had no account with the drawee at the time the negotiable instrument was negotiated or delivered, as determined according to Section 7-3-503 (2).

(2) Payment was refused by the drawee for lack of funds, upon presentation within 30 days after delivery, and the maker or drawer shall not have paid the holder thereof the amount due thereon, together with a service charge of not more than (fill in appropriate amount as provided by law), within 10 days after receiving written notice from the holder of the instrument that payment was refused upon the instrument, as provided in Section 13A-9-13.2.

(3) Notice that payment was refused is mailed by certified or registered mail and is returned undelivered to the sender, when the notice is mailed within a reasonable time after dishonor to the address printed on the instrument or given by the maker or drawer at the time of issuance of the instrument.

(c) Negotiating a worthless negotiable instrument is a Class A misdemeanor.

(d) The definition of “negotiable instrument” in Section 7-3-104 applies to this section and Sections 13A-9-13.2 and 13A-9-13.3.

(e) The definition of “negotiation” in Section 7-3-202 applies to this section and Sections 13A-9-13.2 and 13A-9-13.3.

(f) The definition of “delivery” in Section 7-1-201 (14) applies to this section and Sections 13A-9-13.2 and 13A-9-13.3.

§ 13A-9-13.2. Negotiating worthless negotiable instrument – Notice of refusal of payment upon instrument.

For purposes of Section 13A-9-13.1:

(1) Notice mailed by certified or registered mail, evidenced by return receipt, to the address printed on the instrument or given at the time of issuance shall be deemed sufficient and equivalent to notice having been received by the person making, drawing, uttering, or delivering said instrument

(2) The form of notice shall be substantially as follows:

[ see, USLF form AL-401N ]

(3) Any party holding a worthless negotiable instrument and giving notice in substantially similar form to that provided in subdivision (2) of this section shall be immune from civil or criminal liability for the giving of the notice and for proceeding under the forms of the notice.

Related Statutes:

TITLE 8: Commercial Law and Consumer Protection
CHAPTER 8: Interest and Usury

§ 8-8-15 – Bad check charge; deemed not finance charge.

(a) Any lender of money, extender of other credit, or merchant making a sale of merchandise, goods, or services, or the assignee of the lender, extender of credit, or merchant who receives a check, draft, negotiable order of withdrawal, or like instrument drawn on a bank or other depository institution given by any person in full or partial repayment of a loan, other extension of credit, or a sale of merchandise, goods, or services may, if the instrument is not paid or is dishonored by the institution, charge and collect, through regular billing procedure or otherwise, from the borrower, person to whom the credit was extended, or from whom the instrument was received, a bad check charge of not more than the greater of either twenty-five dollars ($25) or an amount equal to the actual charge by the depository institution for the return of unpaid or dishonored instruments.

(b) Commencing January 1, 1999, the bad check charge in subsection (a) shall increase by one dollar ($1) per year through January 1, 2003, at which time the maximum bad check charge shall be thirty dollars ($30).

Charges imposed in connection with the dishonor of a negotiable instrument shall not be deemed interest finance or other charge made as an incident to or as a condition to the grant of the loan or other extension of credit and shall not be included in determining the limit on charges which may be made in connection with the loan or extension of credit as provided in this section or in any other law of this state.

Inside Alabama Dishonored Check Law