Questions about NFS Rules

What is NSF?

NSF, also called non-sufficient funds, is when a person has a bank account and does not have the money in the account to cover the checks or debits from the account. NSF fee is the fee the bank charges or the company the check was written to charges for the non-payment of the check. A NFS check is also referred to as a bad check, dishonored check, bounced check, cold check, or returned item. Below are the most commonly asked questions about NFS rules and NFS laws as they apply to bankruptcy.

Should a person who lives on Social Security income file bankruptcy to get rid of NSF fees and other debts?

Anybody can file for bankruptcy, but if the person lives on a fixed income, such as SS or other government based income, then the creditors cannot collect on any debts that the person owes. The debt collectors cannot collect the debts because government money cannot be garnished.

What happens when a Chapter 13 Bankruptcy trustee makes false statements in a Motion to Dismiss when the trustee claims to be paid by a check that was returned due to NSF?

In most cases a trustee does not accept checks, but instead they usually only accept certified funds. If the person has the allegations made against him/her, then they can file a motion in court to dispute the allegations. Then the person can appear at the motion and appeal to the judge to strike the statements regarding the NSF check from the record or to file an explanation regarding the NSF check.

Can a person keep a car that they purchased and include NSF checks when he/she files for bankruptcy and what would be the cheapest way to do this?

When the person files for bankruptcy, he/she can keep the car as long as the payments are up to date or paid off. The NSF checks could be included in the bankruptcy as long as there is no criminal actions in which the NSF is associated, since bankruptcy does not include any criminal type of dismissals. In most cases, if the District Attorney has a payment plan then they may set it up with the person to repay the NSF. The person can file bankruptcy themselves, even though in most cases it is recommended that the person use a bankruptcy attorney.

Can a person file a case against a person who had a returned check due to NSF if the person filed for bankruptcy?

If the person pursues the check owner for criminal actions, then the bankruptcy will not affect the criminal aspect of the case. If the person who wrote the check files for bankruptcy, then the actual amount of the check can be discharged during the bankruptcy proceedings. The bankruptcy code does not let the person have a dismissal when the debt was obtained fraudulently. If the person wanted to gain the debt through exception, then he/she would need to hire a lawyer to do this.

When a person writes a check and does not have the money in his/her account to cover the check and it is returned for NSF, then the questions may arise about what can be done to handle the issue. If the person is in debt and wants to file bankruptcy, then he/she may have questions regarding the NSF checks and if they can be included in the bankruptcy. When you are faced with these or other questions about NFS and bankruptcy, you can get answers specific to your situation by asking an Expert to evaluate the details of your case.