Dear Attorney,

I am concerned about my liability regarding several checks that I issued which have since been closed. Although I acknowledge my responsibility and am working toward settlement, I am worried about the legal consequences. Can I be imprisoned for these closed checks even though I am willing to settle the amounts owed?

Sincerely,
A Concerned Borrower

Insights

The concern raised here involves the legal implications of issuing checks that have been closed or dishonored, particularly in light of potential imprisonment under Philippine law.

Under the Bouncing Checks Law (Batas Pambansa Bilang 22), the issuance of a check that is later dishonored due to insufficiency of funds, or a closed account, can lead to both criminal and civil liabilities. In cases like this, imprisonment is a potential consequence, but the law provides opportunities for settlement, which could mitigate the risks.

Criminal Liability Under BP 22

When you issue a check, it serves as a written promise that the amount indicated will be paid when the check is presented. If the check bounces—either because of insufficient funds or a closed account—the issuer may face criminal charges. BP 22 holds issuers of bouncing checks criminally liable even if no intent to defraud exists. The mere fact that the check was dishonored constitutes an offense under this law. However, imprisonment is not automatic, and the law favors settlement and restitution.

Mitigating Factors and Settlement

The Philippine legal system encourages the settlement of financial disputes. The Supreme Court has consistently ruled that imprisonment should be a last resort, especially in cases where the accused is making an effort to settle their obligations. The issuance of a Notice of Dishonor typically precedes the filing of a criminal complaint. If you settle the amount due within a reasonable time after receiving this notice, criminal charges may be avoided altogether.

If the case does reach the courts, but the issuer shows genuine effort to settle the debt—whether through partial payments or negotiations—this could influence the court’s decision. Courts generally view voluntary settlements and restitution favorably, often leading to the dismissal of criminal charges under BP 22.

Civil Liability

In addition to criminal penalties, civil liabilities also arise when checks are dishonored. The payee can pursue civil action to recover the amount indicated in the check. However, civil remedies do not typically involve imprisonment but instead seek to collect the monetary value of the bounced checks.

Practical Advice

If you are facing concerns about closed checks, it is advisable to:

Settle the Obligation as Soon as Possible: As long as you are willing and able to settle the amount owed, it is in your best interest to make payments before any legal actions are initiated. Early settlement will prevent the matter from escalating into a criminal complaint.
Keep Open Communication: Reach out to the payee and demonstrate your willingness to pay. Many creditors are open to negotiating terms, such as installment payments, rather than pursuing legal action.
Consult a Lawyer: Given the complexities of BP 22 and the potential for both criminal and civil liabilities, consulting with an attorney can help clarify your options and guide you through the settlement process.

In conclusion, while the issuance of closed or dishonored checks can lead to criminal charges, Philippine law provides mechanisms that prioritize settlement over imprisonment. With prompt action and legal guidance, you can avoid harsh penalties and resolve the matter amicably.