IC 26-2-7
    Chapter 7. Penalties for Stopping Payments or PermittingDishonor of Checks and Drafts

IC 26-2-7-1
Check
    Sec. 1. As used in this chapter, "check" includes a draft.
As added by P.L.42-1993, SEC.18.

IC 26-2-7-2
Financial institution
    Sec. 2. (a) As used in this chapter, .financial institution. refers toa financial institution (as defined in IC 28-1-1-3).
    (b) The term does not include a person licensed under IC 24-4.5.
As added by P.L.42-1993, SEC.18. Amended by P.L.10-2006, SEC.24and P.L.57-2006, SEC.24; P.L.213-2007, SEC.33; P.L.217-2007,SEC.31.

IC 26-2-7-3
Notice of nonpayment
    Sec. 3. For purposes of this chapter, notice that a check has notbeen paid by a financial institution is considered as having beengiven at the time that the notice was deposited in the regular UnitedStates mail, if the notice was addressed to either of the following:
        (1) The address printed on the check.
        (2) The address given by the person in writing to the payee orholder at the time the check was issued or delivered.
As added by P.L.42-1993, SEC.18.

IC 26-2-7-4
Liability for stopping payment or permitting dishonor of checks
    Sec. 4. Subject to section 8 of this chapter, a person found liableunder other applicable law is liable under this chapter to the holderof a check if the person executed and delivered the check to anotherperson drawn on or payable at a financial institution and the persondoes either of the following:
        (1) Without valid legal cause stops payment on the check.
        (2) Allows the check to be dishonored by a financial institutionbecause of any of the following:
            (A) Lack of funds.
            (B) Failure to have an account.
            (C) Lack of an authorized signature of the drawer or anecessary endorser.
As added by P.L.42-1993, SEC.18.

IC 26-2-7-5
Extent of liability for stopping payment or permitting dishonor ofchecks
    Sec. 5. A person liable under section 4 of this chapter is alsoliable for all of the following:        (1) Interest at the rate of eighteen percent (18%) per annum onthe face amount of the check from the date of the check'sexecution until payment is made in full.
        (2) Court costs incurred in prosecuting an action that may bebrought by the holder to collect on the check.
        (3) Reasonable attorney's fees incurred by the holder if theresponsibility for collection is referred to an attorney who is nota salaried employee of the holder. If legal action is filed toeffect collection and the collection on the check is referred to anattorney who is not a salaried employee of the holder, theholder of the check is entitled to minimum attorney's fees of notless than one hundred dollars ($100).
        (4) Actual travel expenses not otherwise reimbursed undersubdivisions (1) through (3) and incurred by the holder to doeither of the following:
            (A) Have the holder or an employee or agent of the holderfile papers and attend court proceedings related to therecovery of a judgment under this chapter.
            (B) Provide witnesses to testify in court proceedings relatedto the recovery of a judgment under this chapter.
        (5) A reasonable amount to compensate the holder for time usedto do either of the following:
            (A) File papers and attend court proceedings related to therecovery of a judgment under this chapter.
            (B) Travel to and from activities described in clause (A).
        (6) Actual direct and indirect expenses incurred by the holderto compensate employees and agents for time used to do eitherof the following:
            (A) File papers and attend court proceedings related to therecovery of a judgment under this section.
            (B) Travel to and from activities described in clause (A).
        (7) All other reasonable costs of collection.
As added by P.L.42-1993, SEC.18.

IC 26-2-7-6
Liability for continued nonpayment of checks
    Sec. 6. (a) This section does not apply to a person who hasallowed a check to be dishonored because of lack of funds if both ofthe following apply:
        (1) The person reasonably believed that there were sufficientfunds in the account to cover the check.
        (2) The insufficiency of funds is caused by the dishonoring ofa third party check that had been deposited into the person'saccount.
    (b) If a person liable under this chapter does not pay to the holderthe full amount of the check not more than thirty (30) days after thecertified mailing of written notice that the check has not been paid,the person is liable for, and the court shall award judgment for, thefollowing, whichever applies:
        (1) If the face amount of the check is not greater than two

hundred fifty dollars ($250), three (3) times the face amount ofthe check.
        (2) If the face amount of the check is greater than two hundredfifty dollars ($250), the face amount of the check plus fivehundred dollars ($500).
As added by P.L.42-1993, SEC.18.

IC 26-2-7-7
Election of remedies
    Sec. 7. A person must elect whether to pursue a claim either underthis chapter or under IC 34-24-3-1 (or IC 34-4-30-1 before its repeal).
As added by P.L.42-1993, SEC.18. Amended by P.L.1-1998,SEC.138.

IC 26-2-7-8
Exemption from liability for permitting dishonor of checks
    Sec. 8. (a) A person who has allowed a check to be dishonored isnot liable under this chapter if, not more than ten (10) days after theholder has given notice that the check has not been paid by thefinancial institution, the person pays to the holder the full amount ofthe check.
    (b) A payment made under subsection (a) is effective for allpurposes as of the date the payment is made.
As added by P.L.42-1993, SEC.18.