Notice of Dishonor for Bounced Check

A Notice of Dishonor is a letter used to inform a person who has issued a check (the "drawer") that the same has been dishonored by the bank. A Notice of Dishonor is required before a person can be convicted for a violation of Batas Pambansa 22 ("BP 22" or the "Bouncing Check Law").

As explained in Chua vs. People of the Philippines (G.R. No. 196853), BP is violated when the following elements are present:

• the making, drawing, and issuance of any check to apply for account or for value;

• the knowledge of the maker, drawer, or issuer that at the time of issue, he does not have sufficient funds in or credit with the drawee bank for the payment of the check in full upon its presentment; and

• the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.

A Notice of Dishonor creates a presumption that the drawer knew of the insufficiency of funds if the drawer received the Notice of Dishonor and fails to pay or make arrangements for payments within Five (5) Days from their receipt of the Notice. Thus it is important that the Notice of Dishonor can be proved to have been received by the drawee.

This letter can be used if the check was dishonored for:

• insufficient funds;

• unjustified stop payment order but the check would have still been dishonored for insufficient funds if there was no stop payment order; or

• closed account.

How to use this document

This document can be used by any person to inform a drawer of a dishonored check that the same has been dishonored. The letter should be addressed to the drawer of the check. If a corporation is the drawer of the check, then it should be addressed to the person who signed the check (the "signatory"). The user should complete the information required by the document. Once completed, the notice of dishonor should be sent either by registered mail or by personal service.

If the letter will be sent by registered mail, the following documents should be available in the event that a complaint for a violation of BP 22 is filed:

• Registry receipt;

• Registry return card which should be signed legibly by the drawee;

• Affidavit executed by the person who mailed the notice of dishonor detailing the circumstances of the mailing of the same.

If the letter will be delivered through personal service, the drawer must legibly sign a copy of the notice of dishonor and indicate the date of receipt. The copy should then be kept so it can be used as a proof of receipt of the notice of dishonor.

Applicable law

Batas Pambansa 22 and jurisprudence governs Notices of Dishonor.

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