Bad checks: a nightmare no business owner ever wants to encounter when collecting payment. Chasing down debtors and getting them to pay is hard enough as it is. Receiving a bad check makes it even harder. That’s why it’s crucial for every type of business to know how to deal with a bad check situation BEFORE it happens.

Even though it’s a less common issue for businesses whose customer base is mostly commercial (rather than consumer), it’s better to be prepared for the possibility of it happening so you aren’t scrambling if and when it does. Otherwise, you’ll get exactly where you got before: nowhere.

So, to avoid wasting even more time trying to collect payment, you need to nip it in the bud the moment you receive a bad check.

The good news is, I figured out how to do that.

There are 4 critical components to knowing exactly how to deal with a bad check situation. If you follow these 4 steps and use this collection letter template correctly, you’ll be shocked at how much easier it is to collect payment from a debtor who gives you a bad check…

  1. Knowing how to avoid bad checks and the #1 type of check you should NEVER deposit.
  2. The first thing you should do when you receive a bad check and the 3 paths you can take if that doesn’t work.
  3. The 3 things you MUST do if you attempt to collect the money yourself after receiving a bad check.
  4. The 5 key things to look for in your state’s bad check laws to maximize your success when using the collection letter template.

You can discover all 4 of these things right here, as well as a sample bad check letter that you can use in your own business.

While the bad check letter is important (and even crucial for some), it’s not the most important item when it comes to collections. It’s a supplemental piece to the 3-part system that every business needs.

This 3-part system includes the first collection letter, final demand letter, and IRS advantage letter. It increases payments and decreases the amount of time it takes to receive said payments.

Most businesses that use these 3 collection letter templates never have to write another letter again.