# Commercial Law (GCL)

## Title 15. Debt Collection -- Special Provisions

### Subtitle 1. Preferences and Priorities in Insolvency; Assignment for Benefit of Creditors

#### Section 15-101

(a)

  (1) For purposes of this section the following words, as used in federal bankruptcy laws, have the meanings indicated.

  (2) "The case" means the assignment for the benefit of creditors proceeding or the receivership proceeding, whichever is applicable;

  (3) "Commencement of the case" means commencement of the assignment for the benefit of creditors proceeding or receivership proceeding;

  (4) "The court" means the court in which the assignment for the benefit of creditors proceeding or receivership proceeding is filed;

  (5) "Date of the filing of the petition" means the date of the commencement of the assignment for the benefit of creditors proceeding or receivership proceeding;

  (6) "Debtor" means the insolvent as that term is defined in subsection (b) of this section;

  (7)

    (i) "The estate" means the estate that is created when an assignee for the benefit of creditors or a receiver of the assets of an insolvent is appointed;

    (ii) "The estate" includes all property, assets, interests, and rights with respect to which the assignee or receiver is acting as a fiduciary;

  (8) "Order for relief" means the order appointing the assignee for the benefit of creditors or the receiver of the assets of an insolvent;

  (9) "Petition" means the pleading filed to commence the assignment for the benefit of creditors proceeding or receivership proceeding;

  (10) "Trustee" means the assignee for the benefit of creditors or receiver of the assets of an insolvent; and

  (11) Other words, including "insolvent" and "insider", when used in federal bankruptcy law shall have the meanings set forth in the definition section of the federal bankruptcy law or as interpreted by the federal courts applying federal bankruptcy law.

(b)

  (1) In this section the following words have the meanings indicated.

  (2) "Insolvent" means the assignor in an assignment for the benefit of creditors proceeding or the insolvent with respect to whose affairs a receiver has been appointed.

  (3) "Judicial lien" means a lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding.

(c) Any assignee for the benefit of creditors or receiver of the assets of an insolvent shall be vested with full title to all the property and assets of the insolvent and with full power to enforce obligations or liabilities in favor of the insolvent.

(d) All preferences, payments, transfers, and obligations made or suffered by the insolvent which are fraudulent, void, or voidable under any act of the Congress of the United States relating to bankruptcy are fraudulent, void, or voidable, respectively, under this subtitle to the same extent that they would be fraudulent, void, or voidable under applicable federal bankruptcy law.

(e) Any assignee for the benefit of creditors or receiver of the assets of an insolvent may set aside any:

  (1) Fraudulent conveyance as defined in Subtitle 2 of this title; and

  (2) Preference, payment, transfer, or obligation that is fraudulent, void, or voidable under subsection (d) of this section.

(f) Any assignee for the benefit of creditors or receiver of the assets of an insolvent has, as of the date of the commencement of the proceeding, the rights:

  (1) Of a creditor that extends credit to the insolvent at the time of the commencement of the proceeding and that obtains, at such time and with respect to such credit, a judicial lien on all property on which a creditor on a simple contract could have obtained such a judicial lien, whether or not such a creditor exists;

  (2) Of a creditor that extends credit to the insolvent at the time of the commencement of the proceeding and obtains, at such time and with respect to such credit, an execution against the insolvent that is returned unsatisfied at such time, whether or not such a creditor exists;

  (3) Of a bona fide purchaser of real property, other than fixtures, from the insolvent, against whom applicable law permits such transfer to be perfected, that obtains the status of a bona fide purchaser and has perfected such transfer at the time of the commencement of the proceeding, whether or not such a purchaser exists; and

  (4) To avoid any preference, payment, transfer, or obligation that is fraudulent, void, or voidable under subsection (d) of this section.

#### Section 15-102

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Person" includes an individual, corporation, business trust, statutory trust, estate, trust, partnership, limited liability company, association, two or more persons having a joint or common interest, or any other legal or commercial entity.

  (3) "Wages" means all remuneration paid to any employee for his employment, including the cash value of all remuneration paid in any medium other than cash.

(b) The property of an insolvent who makes an assignment for the benefit of creditors or who has his property taken by a receiver under a decree of a court in an insolvency proceeding shall be applied to the following, in the order stated:

  (1) Costs and expenses of the administration of the trust or insolvency proceeding which the court approves;

  (2) Wages of an employee and health, welfare, and pension contributions contracted for in place of wages, earned not more than three months before the assignment or institution of the insolvency proceeding;

  (3) Lien claims of the State, a county, municipal corporation, or other political subdivision of the State perfected or recorded before the assignment or institution of the insolvency proceeding, and claims of persons having judicial liens on property of the insolvent recorded more than four months before the assignment or institution of the insolvency proceeding;

  (4) Unsecured claims of individuals, to the extent of $900 for each individual, arising from the deposit, before the commencement of the case, of money in connection with the purchase, lease, or rental of property, or the purchase of services, for the personal, family, or household use of the individuals, that were not delivered or provided;

  (5) Rent for any interest in real property in the State due not more than three months before the execution of the assignment or institution of the insolvency proceeding;

  (6) Charges in connection with the transportation of goods advanced by one common carrier to another on behalf of a consignor or consignee not more than three months before the assignment or institution of the insolvency proceeding;

  (7) Taxes not included in paragraph (3) of this subsection; and

  (8) Claims of unsecured creditors.

(c) For the purpose of subsection (b)(1) of this section, the landlord's claim for rent for any interest in real property in this State due not more than three months before the execution of the assignment or institution of the insolvency proceeding shall be considered a perfected lien on the distrainable property of the insolvent to the same extent as if distress for rent was levied by the landlord before the assignment or the institution of the insolvency proceeding.

### Subtitle 2. Fraudulent Conveyances

#### Section 15-201

(a) In this subtitle the following words have the meanings indicated.

(b)

  (1) "Assets" means property of a debtor not exempt from liability for his debts.

  (2) "Assets" includes any property to the extent that the property is liable for any debts of a debtor.

(c) "Conveyance" includes every payment of money, assignment, release, transfer, lease, mortgage, or pledge of tangible or intangible property, and also the creation of any lien or incumbrance.

(d) "Creditor" means a person who has any claim, whether matured or unmatured, liquidated or unliquidated, absolute, fixed, or contingent.

(e) "Debt" includes any legal liability, whether matured or unmatured, liquidated or unliquidated, absolute, fixed, or contingent.

#### Section 15-202

(a) A person is insolvent if the present fair market value of his assets is less than the amount required to pay his probable liability on his existing debts as they become absolute and matured.

(b) In determining if a partnership is insolvent, there shall be added to the partnership property:

  (1) The present fair market value of the separate assets of each general partner in excess of the amount probably sufficient to meet the claims of his separate creditors; and

  (2) The amount of any unpaid subscription to the partnership of each limited partner, if the present fair market value of the assets of the limited partner is probably sufficient to pay his debts, including the unpaid subscription.

#### Section 15-203

Fair consideration is given for property or an obligation, if:

(1) In exchange for the property or obligation, as a fair equivalent for it and in good faith, property is conveyed or an antecedent debt is satisfied; or

(2) The property or obligation is received in good faith to secure a present advance or antecedent debt in an amount not disproportionately small as compared to the value of the property or obligation obtained.

#### Section 15-204

Every conveyance made and every obligation incurred by a person who is or will be rendered insolvent by it is fraudulent as to creditors without regard to his actual intent, if the conveyance is made or the obligation is incurred without a fair consideration.

#### Section 15-205

Every conveyance made without fair consideration when the person who makes it is engaged or is about to engage in a business or transaction for which the property remaining in his hands after the conveyance is an unreasonably small capital, is fraudulent as to creditors and other persons who become creditors during the continuance of the business or transaction without regard to his actual intent.

#### Section 15-206

Every conveyance made and every obligation incurred without fair consideration when the person who makes the conveyance or who enters into the obligation intends or believes that he will incur debts beyond his ability to pay as they mature, is fraudulent as to both present and future creditors.

#### Section 15-207

Every conveyance made and every obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay, or defraud present or future creditors, is fraudulent as to both present and future creditors.

#### Section 15-208

(a) Every conveyance of partnership property and every partnership obligation incurred when the partnership is or will be rendered insolvent by it, is fraudulent as to partnership creditors, if the conveyance is made or the obligation is incurred to:

  (1) A partner, whether with or without a promise by him to pay partnership debts, unless the conveyance or obligation represents fair and reasonable compensation for services provided or to be provided by the partner to the partnership and the services are provided or will be provided within 120 days before or after the date the conveyance is made or the obligation is incurred; or

  (2) A person not a partner, without fair consideration to the partnership as distinguished from consideration to the individual partners.

(b) Every conveyance of limited liability company property and every limited liability company obligation incurred when the limited liability company is or will be rendered insolvent by it, is fraudulent as to creditors of the limited liability company, if the conveyance is made or the obligation is incurred to:

  (1) A member, whether with or without a promise by him to pay the limited liability company's debts, unless the conveyance or obligation represents fair and reasonable compensation for services provided or to be provided by the member to the limited liability company and the services are provided or will be provided within 120 days before or after the date the conveyance is made or the obligation is incurred; or

  (2) A person not a member, without fair consideration to the limited liability company as distinguished from consideration to the individual members.

#### Section 15-209

(a) If a conveyance or obligation is fraudulent as to a creditor whose claim has matured, the creditor, as against any person except a purchaser for fair consideration without knowledge of the fraud at the time of the purchase or one who has derived title immediately or immediately from such a purchaser, may:

  (1) Have the conveyance set aside or obligation annulled to the extent necessary to satisfy the claim; or

  (2) Levy on or garnish the property conveyed as if the conveyance were not made.

(b) In an action to have a conveyance set aside or an obligation annulled, it is not necessary as a condition to the granting of relief that the creditor first obtain judgment on the claim.

(c) A purchaser who without actual fraudulent intent has given less than a fair consideration for the conveyance or obligation may retain the property or obligation as security for repayment.

#### Section 15-210

(a) If a conveyance made or obligation incurred is fraudulent as to a creditor whose claim has not matured, he may proceed in a court of competent jurisdiction against any person against whom he could have proceeded had his claim matured.

(b) In the proceeding, the court may:

  (1) Restrain the defendant from disposing of his property;

  (2) Appoint a receiver to take charge of the property;

  (3) Set aside the conveyance or annul the obligation; or

  (4) Enter any order which the circumstances of the case require.

#### Section 15-210.1

A conveyance is not fraudulent as to a creditor if, conducted in accordance with applicable law, the conveyance results from:

(1) A foreclosure sale;

(2) A sale to enforce a statutory lien;

(3) A judicial sale; or

(4) A sale of property under levy.

#### Section 15-211

In any case not provided for in this subtitle, the rules of law and equity, including the law merchant, the law of principal and agent, and the effect of fraud, misrepresentation, duress or coercion, mistake, bankruptcy, or other invalidating cause, shall govern.

#### Section 15-212

This subtitle shall be interpreted and construed to effectuate its general purpose to make uniform the law of the states which enact it.

#### Section 15-213

This subtitle does not repeal the law relating to:

(1) Fraudulent conveyances from one spouse to the other, as provided in Sec.Sec. 4-205, 4-206, and 4-301 of the Family Law Article;

(2) Priorities and preferences in insolvency, as provided in Subtitle 1 of this title; or

(3) Bulk transfers, as defined in Title 6 of this article.

#### Section 15-214

This subtitle may be cited as the Maryland Uniform Fraudulent Conveyance Act.

### Subtitle 3. Assignment of Wages

#### Section 15-301

(a) In this subtitle the following words have the meanings indicated.

(b)

  (1) "Assignment" includes every transfer, sale, pledge, mortgage, or hypothecation, however made or attempted, of the wages of a person or any interest in them.

  (2) "Assignment" does not include an authorization by a borrower or his guarantor or surety for payroll deductions to repay a loan made by a state or federally chartered credit union to a credit union member.

(c) "County" includes Baltimore City.

(d) "Court" means the District Court for the county where an assignor resides.

(e) "Person" includes an individual, corporation, business trust, statutory trust, estate, trust, partnership, association, two or more persons having a joint or common interest, or any other legal or commercial entity.

(f) "Wages" means all remuneration paid to any employee for his employment, including the cash value of all remuneration paid in any medium other than cash.

#### Section 15-302

(a) An assignment of wages is not valid unless:

  (1) The assignment is:

    (i) In writing;

    (ii) Signed and acknowledged by the assignor before a notary public in and for the county where he resides; and

    (iii) Entered the same day on the docket of the court by the clerk; and

  (2) Within three days from the execution and acknowledgment of the assignment, a copy of the assignment with the certificate of acknowledgment is served on the assignor's employer in the same manner as the Maryland Rules provide for service of a summons.

(b) An assignment of wages by a married person is not valid unless also executed and acknowledged by the assignor's spouse in the manner required by subsection (a) of this section.

(c) An assignment of wages to be earned in whole or in part more than six months after the making of the assignment is void.

#### Section 15-303

(a) Proof of the service made in accordance with Sec. 15-302(a)(2) of this subtitle shall be by written admission of the assignor's employer on the original assignment.

(b) Within two days from the date of service, the original assignment with the employer's written admission shall be filed with the clerk of the court.

#### Section 15-304

The assignor's acknowledgment of assignment shall include his affidavit stating that he has not paid and will not pay directly or indirectly on any sum borrowed, an effective rate of simple interest, as defined in Sec. 12-101 of this article, of more than 6 percent per annum.

#### Section 15-305

(a) If an assignee files or threatens to file an action to enforce any assignment of wages which does not comply with any provision of this subtitle, on petition of the assignor or his employer, a court of equity may enjoin the threatened or attempted enforcement of the assignment.

(b) The fact that a petitioner has a complete and adequate remedy at law does not constitute a defense to the maintenance of an action in equity to enjoin the threatened or attempted enforcement of the assignment.

### Subtitle 4. Assignment of Debts

#### Section 15-401

If a surety in any bond or other obligation for the payment of money or a promissory note, or the endorser of a protested draft, pays or tenders the money due on it in full, he is entitled to an assignment of it and, by virtue of the assignment, may maintain an action in his name against the principal debtor.

#### Section 15-402

(a) Subject to the provisions of subsection (d) of this section, the assignee of a bond or other obligation under seal which was assigned under the assignor's signature and seal, may maintain an action in his name against the obligor named in the bond or other obligation.

(b) Except as provided in subsection (c) of this section, if the assignee cannot recover the debt from the obligor because the obligor is unable to pay it or cannot be found, or for any other reason, the assignee may maintain an action against the obligee, unless the assignee is a surety in the bond or other obligation.

(c) If because of the negligence or default of the assignee, he cannot recover the debt from the obligor, the assignee may not maintain an action against the obligee.

(d) An action may not be maintained by the assignee against the obligor unless the obligee certifies before a notary public, in writing on the bond or other obligation, that at the time of the assignment the obligor still owed the amount for which the action is filed.

### Subtitle 5. Assignment of Claims to Nonresidents

#### Section 15-501

(a) It is unlawful for a creditor who is a citizen of the State to assign or transfer a claim against a resident of the State:

  (1) For the purpose of having the claim collected by attachment in a court outside the State; or

  (2) With the intent to deprive the debtor of his rights under the laws of the State which exempt his wages or property from execution.

(b) The provisions of this section do not apply if the creditor, the debtor, or the person owing the money to be attached is not within the jurisdiction of the courts of this State.

#### Section 15-502

(a) If the creditor assigns or transfers the debt to a nonresident in violation of Sec. 15-501 of this subtitle and the debt is collected by the assignee outside the State, the creditor is liable to the debtor for the full amount of the debt including collected interest and costs. In addition, the creditor forfeits his right to exempt his own wages or property from execution if a writ of execution is issued against him for collection of these amounts.

(b) Proof of the fact of the assignment or transfer, whether or not for value, to a nonresident assignee is prima facie evidence of the creditor's intent to deprive the debtor of his rights under the laws of the State which exempt his wages or property from execution.

#### Section 15-503

Any creditor who violates any provision of Sec. 15-501 of this subtitle is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $50.

### Subtitle 6. Attachment of Wages

#### Section 15-601

(a) In this subtitle the following words have the meanings indicated.

(b) "Employee" includes an employee whether he is a resident or nonresident of the State.

(c) "Wages" means all monetary remuneration paid to any employee for his employment.

#### Section 15-601.1

(a) In this section, "disposable wages" means the part of wages that remain after deduction of any amount required to be withheld by law.

(b) The following are exempt from attachment:

  (1) The greater of:

    (i) 75 percent of the disposable wages due; or

    (ii) 30 times the State minimum hourly wage in effect at the time the wages are due, multiplied by the number of weeks during which the wages due were earned; and

  (2) Any medical insurance payment deducted from an employee's wages by the employer.

(c) The amount subject to attachment shall be calculated per pay period.

#### Section 15-602

(a) When an attachment is levied against the wages of a judgment debtor, it shall constitute a lien on all attachable wages that are payable at the time the attachment is served or which become payable until the judgment, interest, and costs, as specified in the attachment, are satisfied.

(b) Any waiver of the limitations contained in Sec. 15-601.1(b)(1) and (2) of this subtitle is void.

#### Section 15-603

(a) While the attachment remains a lien, the employer/garnishee shall withhold all attachable wages payable to the judgment debtor and remit the amount withheld to the judgment creditor or his legal representative within 15 days after the close of the last pay period in each month.

(b) If the employer/garnishee is served with more than one attachment against the same judgment debtor, then the attachments shall be satisfied in the order in which they were served, and each prior attachment must be satisfied before any effect can be given to a subsequent attachment.

#### Section 15-604

If a judgment debtor resigns or is dismissed from his employment while an attachment upon his wages is wholly or partly unsatisfied, the attachment shall lapse and no further deduction may be made unless the judgment debtor is reinstated or reemployed within 90 days of the resignation or dismissal.

#### Section 15-605

(a) Within 15 days after the end of each month, the judgment creditor shall furnish the employer/garnishee and the judgment debtor a written statement showing all payments that were credited to the account of the judgment debtor during that month. However, this subsection shall not apply if no payments were received by the judgment creditor during that month.

(b) The judgment creditor shall within 15 days after the satisfaction of the judgment, interest, and costs notify in writing the employer/garnishee and the clerk of the court of the satisfaction.

(c) All payments received by a judgment creditor shall be credited first against the accrued interest on the unpaid balance of the judgment, if any, second upon the principal amount of the judgment, and third upon those attorney's fees and costs actually assessed in the cause.

(d) If the judgment creditor fails to comply with the obligations imposed by this section, then the court may set aside the attachment and order the judgment creditor to pay reasonable attorney's fees and costs of the party seeking to set aside the attachment.

#### Section 15-606

(a) An employer may not discharge his employee because the employee's wages are subjected to attachment for any one indebtedness within a calendar year.

(b) Any employer who willfully violates the provisions of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding one year or both.

#### Section 15-607

(a) Wages, due from or payable by the State, or a county, municipal corporation, or other political subdivision, and the public officers of the State or a county, municipal corporation, or other political subdivision to an individual, are subject to attachment process brought for the enforcement of the private legal obligations of the individual in the same manner and to the same extent as if the State, county, municipal corporation, or other political subdivision, and their respective public officers, were a private person.

(b) The State, or a county, municipal corporation, or other political subdivision, and their respective public officers, may deduct and retain from the individual's wages an additional $2 for each deduction made under the attachment process of this subtitle or under Title 31, U.S.C. Sec. 3720D.

### Subtitle 7. Offsets

#### Section 15-701

(a) In this subtitle the following words have the meanings indicated.

(b) "Consumer debt" means any debt arising from a transaction for consumer goods as defined in Sec. 9-109 of this article.

(c) "Offset" means the seizure by a bank of personal property, belonging to a customer, in the bank's possession or under its control on deposit to settle delinquent debts.

#### Section 15-702

For the purposes of this article, a bank or financial institution may not offset any property in its possession or money from a customer's savings or checking account for the settlement of a delinquent consumer debt unless:

(1) The offset is authorized in writing by the customer; or

(2) A court order is obtained to permit the offset.

### Subtitle 8. Dishonored Checks and Other Instruments -- Collection

#### Section 15-801

(a) In this subtitle the following words have the meanings indicated.

(b) "Check" has the meaning provided in Sec. 3-104(f) of this article.

(c) "Dishonor" has the meaning provided in Sec. 3-502 of this article.

(d) "Drawer" has the meaning provided in Sec. 3-103(a)(3) of this article.

(e) "Holder" has the meaning provided in Sec. 1-201(20) of this article.

(f) "Holder in due course" has the meaning provided in Sec. 3-302 of this article.

(g) "Instrument" has the meaning provided in Sec. 3-104(b) of this article.

(h) "Issue" has the meaning provided in Sec. 3-105 of this article.

(i) "Maker" has the meaning provided in Sec. 3-103(a)(5) of this article.

(j) "Negotiation" has the meaning provided in Sec. 3-201 of this article.

(k) "Notice of dishonor" has the meaning provided in Sec. 3-503 of this article.

(l) "Stop payment order" has the meaning provided in Sec. 4-403 of this article.

#### Section 15-802

(a) When a check or other instrument has been dishonored by nonacceptance or nonpayment and has not been paid within 10 days, the holder to whom the check or other instrument was issued or negotiated may send a notice of dishonor to the maker or drawer as provided under this section.

(b) If a check or other instrument has not been paid within 30 days after the holder has sent a notice of dishonor to the maker or drawer, the maker or drawer of a check or other instrument that has been dishonored shall be liable for:

  (1) The amount of the check or instrument;

  (2) A collection fee of up to $35; and

  (3) An amount up to 2 times the amount of the check, but not more than $1,000.

(c)

  (1)

    (i) The holder of a check or other instrument that has been dishonored may seek the damages provided under this section in the District Court of Maryland 30 days after a notice of dishonor has been sent by mail to the last known address of the maker or drawer.

    (ii) For each notice sent by the holder under subparagraph (i) of this paragraph, the holder shall:

      (1) Obtain a certificate of mailing from the U.S. Postal Service; or

      (2) Execute an affidavit that attests to the mailing of the notice in compliance with subparagraph (i) of this paragraph.

  (2) A notice of dishonor sent by a holder under this section to a maker or drawer of a dishonored check or other instrument shall substantially comply with the form prescribed in Sec. 15-803 of this subtitle.

(d) A holder may not recover any damages under subsection (b)(3) of this section if:

  (1) The holder has demanded of, and received from, the maker or drawer:

    (i) Collection costs in excess of the collection fee provided under subsection (b)(2) of this section; or

    (ii) Collection costs within 30 days after the mailing of the notice of dishonor, under subsection (c) of this section; or

  (2) The dishonored check or other instrument provides for the payment of collection costs in the event of dishonor.

(e)

  (1) It shall be a complete defense to any action brought under this section by any holder of a dishonored check or other instrument that, within 30 days from the mailing of the notice of dishonor, the maker or drawer has paid to the holder the full amount of the check or other instrument and collection costs of not more than $35.

  (2) It shall be a complete defense to any action brought under this section by a holder to whom a dishonored check or other instrument was issued that the dishonor of the check or other instrument was due to a justifiable stop payment order or to the attachment of the account.

  (3) In any action brought under this section by a holder or holder in due course to whom a dishonored check or other instrument was negotiated, the action is subject to all valid defenses that may be raised by the maker or drawer against the holder or holder in due course under Title 3 of this article.

#### Section 15-803

(a) A notice of dishonor sent by a holder to a maker or drawer under Sec. 15-802 of this subtitle shall substantially comply with the following form:

"NOTICE OF DISHONORED CHECK 

Date _________________________________________________________________________

Name of Issuer  _______________________________________________________________

Street Address  _______________________________________________________________

City and State ________________________________________________________________

You are according to law hereby notified that a check or instrument numbered ___________ and dated ___________,  drawn on  the ___________ bank of ___________ in the amount of ___________ has been returned unpaid with the notation the payment has been refused because of  ___________________________________________

Within  30 days from the mailing of this notice, you must pay or tender to __________

______________________________________________________________________________

(Holder) 

sufficient money to pay such check or instrument in full and a collection fee of $________ (not more than $35). If payment of the above amounts is not made within 30 days of the mailing of this notice of dishonor, you shall be liable under Sec. 15-802 of the Commercial Law Article, in addition to the amount of the check or instrument and a collection fee of up to $35, for an amount up to 2 times the amount of the check or instrument, but not more than $1,000. In addition, you may be prosecuted under Title 8, Subtitle 1 of the Criminal Law Article of Maryland and subject to the following penalties: 

(1) If the property or services has a value of at least $1,000 but less than $10,000, a fine not exceeding $10,000 or imprisonment not exceeding 10 years, or both; 

(2) If the property or services has a value of at least $10,000 but less than $100,000, a fine not exceeding $15,000 or imprisonment not exceeding 15 years, or both;

(3) If the property or services has a value of $100,000 or more, a fine not exceeding $25,000 or imprisonment not exceeding 25 years, or both;

(4) If the property or services has a value of less than $1,000, a fine not exceeding $500 or imprisonment not exceeding 18 months, or both.

It shall be a complete defense to any action brought by any holder under Sec. 15-802 of the Commercial Law Article that, within 30 days from the mailing of the "Notice of Dishonored Check", the maker or drawer has paid the holder the full amount of the check or instrument and collection costs of not more than $35.  A holder may not recover any damages if the holder has demanded of, and received from, the maker or drawer collection costs exceeding $35.

It shall be a complete defense to any action brought under Sec. 15-802 of the Commercial Law Article by a holder to whom a dishonored check or other instrument was issued that the dishonor of the check or other instrument was due to a justifiable stop payment order or to the attachment of the account.

In any action brought under Sec. 15-802 of the Commercial Law Article by a holder or holder in due course to whom a dishonored check or other instrument was negotiated, the action is subject to all valid defenses that may be raised by the maker or drawer against the holder or holder in due course under Title 3 of the Commercial Law Article."

(b) The holder to whom a check or other instrument is issued or negotiated may post a clearly conspicuous notice at or near the point of receipt stating the liability of the maker or drawer for the collection fee and damages provided in Sec. 15-802 of this subtitle and criminal penalties provided in Sec.Sec. 8-106 and 8-107 of the Criminal Law Article.

#### Section 15-804

(a) Notwithstanding any other provisions of this article, Sec.Sec. 15-802 and 15-803 of this subtitle do not apply to any check:

  (1) Tendered by a maker or drawer in complete or partial satisfaction of a preexisting credit or loan obligation incurred by the maker or drawer under Title 12 of this article; or

  (2) That is not a bad check as described under Sec. 8-103 of the Criminal Law Article.

(b) Notwithstanding any other provision of this article, Sec.Sec. 15-802 and 15-803 of this subtitle shall be construed to grant any holder to whom the check or other instrument was issued or negotiated a right of recourse which is alternative to any other right of recourse granted to that holder under Title 3 of this article.

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Md. Code Ann., Com. Law (as displayed at mgaleg.maryland.gov, October 16, 2026)