# Commercial Law (GCL)

## Title 15. Debt Collection -- Special Provisions

### 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)