A practical legal article on criminal, civil, and procedural consequences of dishonored checks

This article is for general information and education. It is not legal advice. Laws and jurisprudence are fact-specific; consult a lawyer for guidance on your situation.

1) What counts as a “bounced check” (dishonored check)

A check “bounces” when the drawee bank refuses payment upon presentment. Common bank reasons include:

DAIF / NSF – Drawn Against Insufficient Funds / Not Sufficient Funds
Account closed (or no account)
Stop payment order (depending on circumstances)
Stale check (presented beyond the allowable period)
Material defect (e.g., incomplete details, irregular signature)

In Philippine law, bounced checks can trigger criminal liability (most commonly under Batas Pambansa Blg. 22) and/or criminal estafa (under Article 315(2)(d) of the Revised Penal Code) plus civil liability (collection of the amount, damages, etc.).

2) The main criminal law: Batas Pambansa Blg. 22 (BP 22)

A. What BP 22 punishes

BP 22 penalizes the making, drawing, and issuance of a check that is later dishonored by the bank due to:

insufficient funds, or
lack of credit with the bank, and also covers certain situations involving stop-payment orders tied to insufficient funds.

BP 22 is generally treated as malum prohibitum: the act is punished because the law prohibits it, and criminal intent is not the central issue the way it is in fraud crimes. What matters is whether the statutory elements are met.

B. Elements (what the prosecution must prove)

In simplified form, BP 22 typically requires proof of:

The accused made/drew/issued a check;
The check was issued to apply on account or for value (i.e., it wasn’t purely a worthless piece of paper with no transactional context);
The check was presented to the bank within the required period (commonly within a reasonable time; in practice aligned with banking rules and check validity);
The check was dishonored for insufficiency of funds or credit (or other covered grounds); and
The issuer knew at the time of issuance that funds/credit were insufficient.

Because proving “knowledge” directly is hard, the law uses a presumption tied to notice of dishonor (next section).

3) Notice of dishonor: the make-or-break requirement in many BP 22 cases

A. Why notice matters

BP 22 builds in a mechanism that links dishonor + notice + failure to pay to a presumption of knowledge of insufficiency.

B. The “5 banking days” rule

After the issuer receives notice of dishonor, the issuer is given five (5) banking days to:

pay the holder in full, or
make arrangements for full payment (practically, payment is the safest route).

If the issuer does not pay within that period, the law allows a presumption that the issuer knew of the insufficiency when the check was issued.

C. Practical points about notice (and common litigation issues)

The notice must generally be received by the issuer (proof of receipt often becomes the battlefield).
Written demand letters are commonly used, served personally or via registered mail/courier with proof of delivery.
Lack of competent proof that the issuer received notice can weaken or defeat the BP 22 case depending on the facts and how the evidence is presented.

Tip for payees/holders: keep the bank return slip/memo, demand letter, registry receipts, tracking printouts, affidavits of service, and any acknowledgments.

4) Penalties under BP 22: jail, fine, or both—and what usually happens in practice

A. Statutory penalty framework

BP 22 provides these penalty options, generally framed as:

Imprisonment (commonly expressed as a range up to one year), or
Fine (often described as up to double the amount of the check, subject to a cap in the statute), or
Both, at the court’s discretion, within legal limits.

B. The “fine preferred” policy trend

Philippine courts have, over many years, often been guided by Supreme Court policy issuances that encourage the imposition of fines rather than imprisonment for BP 22 violations in many situations—especially for first-time offenders, where payment/settlement is possible, and where imprisonment would be disproportionate.

That said, imprisonment remains legally possible, particularly when circumstances justify it (e.g., repeated offenses, bad faith indicators, or when the court finds fine inadequate to serve the purposes of the law).

C. What payment does—and does not—do

Paying after dishonor can reduce exposure and is often critical in negotiations and may influence penalty (e.g., fine vs. jail), but:
Payment does not automatically erase criminal liability once the offense is complete and the case is pursued.
Early payment (before filing) can sometimes prevent escalation if the payee chooses not to file, but it is not a guaranteed shield if the complainant proceeds anyway.

5) BP 22 vs. Estafa by postdated or bouncing check (Revised Penal Code Art. 315(2)(d))

A bounced check can also be prosecuted as estafa (swindling) in certain situations.

A. How estafa is different

Estafa is a fraud crime. It typically requires:

Deceit (fraudulent act/representation), and
Damage or prejudice to the offended party.

For the check variant (Art. 315(2)(d)), the prosecution generally tries to show that the accused issued a check as an inducement (or as part of the fraudulent scheme) and that the victim relied on it and suffered damage.

B. Common dividing line (practical rule of thumb)

BP 22 focuses on the issuance of a bad check and dishonor with notice rules.
Estafa focuses on fraudulent procurement—the check was used to trick the victim into parting with money, goods, or property, and the victim was damaged.

In many real disputes:

If the check is merely payment of a pre-existing debt and not the means by which the victim was induced to give something, BP 22 is more common than estafa (though facts vary).
If the check was issued to obtain money/goods at the time, and the victim relied on it, prosecutors may consider estafa.

C. Can a person be charged with both?

It is possible for complaints to be filed invoking both theories depending on the facts, but legal rules on double jeopardy and the distinct elements of each offense matter. Courts look carefully at whether the same act is being punished twice under the same elements (simplifying heavily: the legal “test” is element-based).

6) Civil liability: the money obligation doesn’t disappear

Even when a criminal case is filed, the underlying obligation often remains collectible through:

Civil action for sum of money (collection), and/or
Civil liability impliedly instituted with the criminal case (depending on how the action is pursued and the pleadings), and/or
Settlement and compromise (common in check cases)

Potential civil exposures include:

Principal amount of the check
Interest (legal or stipulated, subject to rules)
Attorney’s fees (if justified and awarded)
Damages (actual, moral, exemplary—depending on proof and legal basis)
Costs of suit

7) Who can be liable: individuals, corporations, and signatories

A. Individual issuer/signatory

The person who signed and issued the check is typically the primary accused.

B. Corporate checks

If a check is drawn against a corporate account, liability often centers on the officer/signatory who actually signed and issued the check—because the criminal act is personal in nature. Corporate structures do not automatically immunize signatories.

8) Common defenses and issues in bounced-check litigation

The viability of defenses depends heavily on documents and testimony. Common angles include:

A. No valid notice of dishonor / no proof of receipt

A frequent issue is whether notice was properly received, and whether evidence of receipt is credible and admissible.

B. Check was not issued “for value” / was not meant to be negotiated

Sometimes parties argue the check was issued as:

a guaranty only,
a security check (still risky; courts often treat “security checks” as not exempt by label alone), or
for a conditional purpose

Whether this defeats liability depends on facts and jurisprudential treatment.

C. Forged signature / unauthorized issuance

If the accused can credibly prove the signature was forged or issuance was unauthorized, liability may not attach.

D. Bank error

If dishonor was due to bank mistake (not the drawer’s insufficiency), that can be material—though it must be proven, typically with bank testimony/documents.

E. Payment within the statutory period after notice

If full payment was made within the 5 banking days after receipt of notice, that can defeat the statutory presumption and may defeat the BP 22 charge depending on proof and timing.

9) Procedure: what usually happens from demand letter to trial

Step 1: Dishonor and documentation

The payee gets the bank’s return slip/memo indicating the reason for dishonor.

Step 2: Demand / notice of dishonor

The payee (or counsel) sends a written demand/notice to the issuer and keeps proof of receipt.

Step 3: Filing a complaint (prosecutor’s office)

BP 22 and estafa complaints are usually filed with the Office of the Prosecutor where venue is proper.

Step 4: Preliminary investigation

Respondent is required to submit a counter-affidavit.
Prosecutor determines probable cause.

Step 5: Filing of Information in court

If probable cause exists, the prosecutor files the case in court.

Step 6: Arraignment, pre-trial, trial

Many cases settle before full trial; others proceed to judgment.

10) Venue: where to file

Venue questions can be technical. In check cases, potential venues may involve where:

the check was issued/delivered,
the check was deposited/presented, and/or
the check was dishonored.

Because filing in the wrong venue can waste time and lead to dismissal, practitioners usually analyze the chain of events carefully (issuance, delivery, presentment, dishonor, notice).

11) Prescription (time limits to file)

BP 22

BP 22 offenses are generally treated as special laws with prescriptive periods governed by Act No. 3326 (commonly resulting in a four-year prescriptive period, counted from discovery/commission depending on the applicable doctrine and facts).

Estafa

Estafa prescription depends on the penalty imposable under the Revised Penal Code and can be longer than BP 22.

Because prescription can hinge on specific dates (issuance, dishonor, notice, filing, interruptions), it’s worth computing carefully.

12) Practical guidance for businesses and individuals

If you received a bounced check (payee/holder)

Secure the bank return memo stating the reason for dishonor.
Send a written notice/demand promptly and keep proof of receipt.
Preserve all transaction documents: invoices, delivery receipts, contracts, chats/emails.
Consider parallel remedies: collection case and/or criminal complaint, depending on leverage and objectives.

If your check bounced (issuer)

Communicate immediately and pay/settle quickly if the obligation is valid.
If you received notice, treat the 5 banking days as critical.
If there is a legitimate dispute (defective goods, non-delivery, bank error), document it thoroughly and consult counsel before taking steps that could be misconstrued as bad faith.

13) Key takeaways

The Philippines primarily penalizes bounced checks through BP 22, which is easier to pursue than fraud-based cases because it focuses on issuance and dishonor, reinforced by notice rules.
Notice of dishonor and proof of receipt are central in many cases.
Penalties can include fine and/or imprisonment, but courts often lean toward fines in many circumstances, without removing the possibility of jail where warranted.
Estafa is separate and requires deceit and damage; it applies when the check is part of a fraudulent scheme, not merely a failed payment.
Even if the criminal case is pursued or settled, the civil obligation to pay can remain enforceable.

If you want, tell me a scenario (e.g., “security check for a lease,” “postdated checks for goods delivered,” “account closed,” “stop payment due to dispute”), and I can map out which law is most likely implicated, what evidence usually matters most, and what outcomes are typical.