They stopped the check. That is a different fight.

GEN. OBLIG. LAW § 11-104

Read the return code first.

Your bank tells you why the check came back, and that one line decides which page you should be on. "NSF," "insufficient funds," "account closed," "no account," and "unable to locate account" all mean the maker's bank could not or would not pay because the money or the account was not there. Those are dishonored checks in the sense New York's General Obligations Law § 11-104 uses, and the statutory demand sequence on our bounced check law hub applies.

"Stop payment," "payment stopped," or "refer to maker" usually mean something else: the maker called the bank and told it not to pay. Sometimes that is because the check was lost and re-issued. More often, in the cases we see, it is because the maker decided after writing the check that they did not want to pay you, usually because of a dispute about the work, the goods, or the deal.

If the code is ambiguous, call your bank and ask for the specific reason. Get it in writing if you can. This is the first exhibit in either case.

Why the statute treats them differently.

The dishonored check statute exists to deal with a specific wrong: putting a worthless piece of paper into commerce. The maker wrote a check that could not be paid, and the law makes them pay the face amount plus, after a certified-mail demand and where the payee had posted the required notice, additional damages. The statute is built for the maker who had no money, not for the maker who had money and changed their mind.

A deliberate stop payment over a genuine dispute is a different thing. The maker is saying, in effect, "I do not owe you this, or not all of it, and I am not going to pay until we sort it out." New York's statute is generally understood not to reach a check stopped because of a good-faith dispute about the underlying obligation. The add-on damages are aimed at worthless checks, and a court will not impose them on someone who stopped payment because they believed the work was defective or the goods never arrived.

That does not mean the stop payment is free for the maker. It means the case reverts to what it always was underneath: you say you are owed money for something you provided, they say they are not obligated to pay, and a court decides who is right under the contract. The check becomes a powerful exhibit in that case, because it is the maker's own written acknowledgment, at the time, that the amount was owed.

The gray zone: stop payment with no real dispute.

Some makers stop a check not because they dispute anything but because they do not want to pay and think "stop payment" sounds better than "bounced." The tell is the timeline. A maker who never complained about the work, accepted the goods, thanked you, and then stopped the check the day before it was going to overdraw their account is not in a good-faith dispute. They are using the stop payment to dress up a nonpayment.

In that situation, a demand letter should say so. It recites the absence of any complaint, the maker's acknowledgments, and the timing, and it demands the face amount on the contract while reserving the position that the stop was not made in good faith. Whether the statutory add-on applies to a bad-faith stop is a fact question we would rather argue from a well-documented letter than from a phone call. Be conservative about what you claim, but do not concede the good-faith dispute when there was not one.

What to do if it really is a dispute.

If the maker has a genuine complaint, treat the stopped check as a breach of contract case and build it as one:

• The agreement. Contract, proposal, estimate, text thread, invoice. What did you agree to provide and for what price?
• Performance. Delivery confirmations, photos of completed work, sign-offs, the maker's thank-you text.
• The complaint. What exactly did they say was wrong, when did they first say it, and was it before or after the check was stopped?
• The check. The maker's acknowledgment of the amount owed as of the date it was written.

The letter in a dispute case does not cite the dishonored check statute. It cites the contract, lays out performance, addresses the complaint directly, and demands the price. If the complaint has some merit, say a punch-list item on a renovation, the letter can offer to cure it or to credit a stated amount, which often resolves the whole thing. Contractors in this spot should read home improvement contract disputes and mechanics lien vs. demand letter, because a lien deadline may be running at the same time. Businesses with an unpaid invoice behind the stopped check should start with unpaid invoices for small businesses.

What a demand letter does in each case.

Bounced (NSF, closed account). The letter is the statutory demand. Sent by certified mail, it starts the window that makes additional damages available where notice was posted, and it sets up the small claims case with the return notice attached. The letter leads with the statute because the statute is the leverage. Most makers pay inside the window.

Stopped (genuine dispute). The letter is a contract demand. It uses the check as an admission of the amount, addresses the maker's complaint on the merits, offers any cure or credit that is actually warranted, and demands the balance by a deadline. The leverage is the strength of the contract case and the maker's own check, not a statute. Many of these settle for something close to the face amount once the maker sees their complaint answered in writing by a lawyer.

Stopped (no real dispute). The letter is a contract demand that also documents the absence of any good-faith basis for the stop. It preserves the argument that the stop was not in good faith without overclaiming the statutory add-on. The small claims judge hears the timeline and draws the obvious conclusion.

In all three, the letter is attorney-signed, states the amount and the deadline, and attaches the check and the return notice. See how our flat-fee demand letters work.

A worked example.

A photographer shoots a Long Island wedding for $4,500, receives the balance by check the next day with a text reading "the photos are amazing, thank you," and deposits it. It comes back "payment stopped." The couple now says the album was late and they want half off.

That is a stopped check with a weak dispute. The letter cites the contract and the delivery, quotes the "amazing" text, addresses the album timing (the contract gave eight weeks; the album shipped in seven), and demands $4,500 by a date. It does not claim the dishonored check add-on, because the couple would argue good faith and the statutory damages are small relative to the $4,500 at stake. The couple's lawyer reads the letter, reads the text, and recommends paying. If they do not, small claims in Nassau County handles up to $5,000, and the photographer walks in with a contract, a delivery record, a thank-you text, and a stopped check for the exact amount.

When to skip the letter.

If the dispute is real and the maker has a point, a letter that refuses to engage with it will not work; consider whether a direct offer to cure or credit is faster. If the amount is small, a flat fee may not be proportionate. If the maker is judgment-proof, the letter still sets up the claim, but the collection problem is the real one. Our demand letter vs. small claims page helps with the call, and bounced rent checks covers the landlord-tenant version of all of this.