Law on Bouncing Checks

Question 1

The relevant law for the topic of Law on Bouncing Checks (Cite the title of the law and its corresponding statute no.)

Answer 1

Batas Pambansa Blg. 22 / Anti-Bouncing Check Law

Question 2

Known as a worthless check

Answer 2

Bounced check

Question 3

An arrangement or understanding with the bank for the payment of any check

Answer 3

Credit

Question 4

What does the law say on checks without sufficient funds? (3 instances)

Answer 4

• Upon presentment for payment, is dishonored by the bank for insufficiency of funds, and the issuer knows at the time of issue that he does not have sufficient funds in or credit with the drawee bank.
• Which would have been dishonored for insufficiency of funds, had the drawer not ordered his bank to stop the payment of the check, without a valid reason for such order
• When presented for payment within 90 days from issue, is dishonored by the bank for insufficiency of funds, even if the issuer has sufficient funds in or credit with the bank at the time of issue.

Question 5

Who shall be liable when the check bounces?

Answer 5

Any person making, drawing and issuing a check without sufficient fund is liable.

Question 6

Who shall be liable in case the check is issued by a corporation?

Answer 6

The person/persons who actually signed in behalf of such drawer shall be liable AKA the officers who signed the check.

Question 7

What is the punishment? (cite the complete punishment)

Answer 7

The punishment shall be either or both of the following:

• Imprisonment of not less than 30 days but not more than 1 year.
• Fine of not less than but not more than double the amount of the check, but shall not exceed P200,000.

Question 8

Is Batas Pambansa Blg. 22 constitutional (as no person shall be imprisoned for non-payment of debt?)

Answer 8

Yes, it is constitutional because the imprisonment is for the making of such check(w the knowledge of having insufficient funds) and not because of the non-payment of debt.

Question 9

What is the evidence of knowledge of insufficient funds?

Answer 9

The making, drawing, and issuance of a check payment of which is refused by the drawee because of the insufficient funds in or credit with such bank, when presented within 90 days from the date of the check.

Question 10

Is there an exception to the presumption of knowledge of insufficiency of funds or credit?

Answer 10

Yes, when the maker / drawer pays the holder of the check within 5 banking days after receiving notice that such check has not been paid by the drawee.

Question 11

What is the duty of the drawee when check has bounced?

Answer 11

To cause to be written, printed, or stamped on the check, in plain language, or attached thereto, the reason for its dishonor or refusal to pay.