SCENARIO 9: Bad Check received

In this scenario the borrower has sent you a check that has been returned by the bank.

In effect you have received no payment at all, but this is slightly different from the previous example where no check is received, as you have a Bad Check charge to add to the payment that is now unpaid.

If you have received a Bad Check, your bank has probably charged you for processing the check and you will want to recoup this cost from your borrower as it is unfair that you should have to pay it.

The Bad Check charge is set on the Setup worksheet in Cell D47, which you should have defined when first setting up the loan.

Click on the Record Payments worksheet.

In our example, there is a $25.00 charge for a Bad Check.

You will probably have already entered a payment before you are informed of the problem with the check.

In our example below, we received a payment for April 1 2021 which we have applied.

Entering a Bad Check

The payment for April 1 2021 was entered and applied, but it only later on that the bank confirms that the Check was returned.

Change payment to No Payment and Bad Check
Because the payment was returned and there was a Bad Check, we can't leave the payment applied and have to alter it to accrue the now missing payment and Bad Check charge.

In our example, what we have done is cleared the Received Date in Column B and the Amount Received in Column E and the Total to Apply in Column M.

What we are now doing is the same as Scenario 8 for when NO payment is received. Learn how to enter No payment received.

When you have cleared the payment, all you have to do is enter a Date in Column G to accrue the now missing payment. This is exactly the same as Scenario 8.

In our example below, you can see that we have entered the Date 4/11/21 as we want to accrue the payment and a Late Charge. Learn more about Late Charges.

Accruing a payment that has a Bad Check

What about the Bad Check Charge?
Now that the payment that was applied has been altered to accrue a missing payment and Late Charge, the final step is to tell Lender Spreadsheet Pro to accrue a Bad Check Charge.

All you have to do is enter the word bad into column I and the Bad Check Charge will be automatically accrued along with the Late Charge.

In our example, we have now entered the word bad and you can see that in Column K the Late Charge has increased by the amount of the Bad Check Charge which we set at $25.00.

Enter the word bad in Column K to trigger the bad check charge

In our example, we have now entered the word bad and you can see that in Column K the Late Charge has increased by the amount of the Bad Check Charge which we set at $25.00.

This Bad Check Charge is now accrued along with any other Late Charges.

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