Cheques are still used to pay in business, but when one "bounces" (the bank refuses payment for insufficient funds or a closed account), it becomes a dispute where both creditor and debtor should understand their rights and risks.
A bounced cheque can be both civil and criminal
A cheque is clear evidence of a debt. The creditor can sue for the cheque amount in a civil case, and in some cases issuing a cheque knowing there were insufficient funds can carry criminal liability — which sets bounced cheques apart from ordinary debts.
For the creditor (cheque holder)
- Keep the original cheque and the bank's return slip — key evidence.
- Record the source of the debt — what sale/loan, and when.
- Issue a demand letter and consult a lawyer about suing and the limitation period.
For the debtor (issuer)
If a cheque you issued bounces, don't ignore it — negotiate payment or instalments promptly, because beyond civil liability there may be criminal risk. Having a lawyer negotiate and verify the debt amount helps limit the damage.
📌 See more: civil litigation & enforcement · debt collection & enforcement guide
Whether you hold a bounced cheque or issued one and now have a problem, talk to our team to plan the right approach.