I stopped payment on a credit collection check, What can they Do?

Question

I had a credit collection agency contact me wanting payment, I was expecting a large deposit from the tax rebate check that same day so I allowed the transaction. Then after trying to confirm my deposit with the bank the rebate check never went through, and come to find out had been taken away from me due to my mother claiming my on her tax return. So I called the collection agency explaining this but of course they would not listen and said that there was nothing they could do about the check now. So I called the bank and had a stop payment put on the check, now they are calling me saying that they are taking legal action over me writing bad checks. Is this possible.

Answer 1

Putting a stop payment on a check is a bit different then writing a bounced check....and legally there isn't anything they can do to you.  

It depends also on the state you live in.  But (for example) Michigan law would not make this illegal.  

Usually, if a check you cashed was returned because a stop payment was placed on it, they may take legal action. For their lawsuit to be successful, they must show that the person who issued the stop payment acted in bad faith. Usually they can sue for the amount of the check plus damages up to three times the amount of the check.

But in your case, you acted in good faith.  You even gave them notice that you were not going to have money in the account, yet they planned to cash the check anyway.  It would have helped if you had a letter or some proof of your communication....but I still think you can easily defend this if your state allows such lawsuits.

Answer 2

Yes that is possible.  Call them back and make a payment arrangement on a monthly badsis and stick to it.  Let them add on fees to returned check and interest.  No one likes doing it that way, but it beats going to jail or getting your wages garnisheed.

Answer 3

Yeah, they might be able to push the issue.  You should have notified them in writing that you were stopping payment on the check instead of via phone.  You now have no paper trail.

They can take you to court and sue you for the debt.  They would win  and with the judgment, they can garnish your wages, attach your bank account, and lien your property.

I'm curious how your mother was able to claim you on taxes.  It sounds like you are living independent and self supporting.  She shouldn't have been able to claim you.