Published — October 7, 2017
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Related Topic: Repossession of Mortgaged Automobiles
No business can survive without sufficient funds, as every action done in its operations generally have corresponding costs attached to it. When it comes to finances, however, one of the most common challenges faced by many businesses is the difficulty of collecting from their debtors the amounts owed to them. So, how is debt collection being carried out?
Pressuring debtors to obtain payment
Pressure may be employed, but only through legitimate means, such as filing of legal action, or availment of other legal remedies to collect the amount due. Resort to harassment in collecting from the debtor should be avoided, as this may enable the debtor to turn the table against the creditor who, because of his bullying, would just expose himself to civil liability for damages, and even criminal liability for coercion.
Some examples of such bullying would be by calling debtors during very inconvenient hours (e.g. between 10:00 PM and 6:00 AM); employment of threats; misrepresenting oneself as lawyers, police officers, or other government authorities to intimidate the debtor; making false statements about an impending punishment in connection with a pending case where no case is actually pending; contacting the debtor’s friends, family, neighbors, and workmates, and discussing with them the details of the debtor’s indebtedness; and threatening to deposit post-dated checks prematurely.
Legal remedies in collecting unpaid debt
Creditors who are having problems collecting from their debtors may very well resort to the following legal remedies:
- To file an action for collection of sum of money before the court.
- In case the debt is secured by a mortgage, the creditor may choose either to file an ordinary action for collection, or he may have the mortgage foreclosed.
- In case there is a check issued, which bounced, the offended party may file a complaint for violation of the Anti-Bouncing Checks Law. This is a criminal action, and therefore imprisonment is among the possible consequences upon conviction.
Civil action for collection of sum of money
If the creditor opts to file an action for collection of sum of money, all that the creditor needs to establish are the existence of a transaction for which the debtor became indebted (which may be a loan, or any dealings that create obligations such as sale concerning unpaid purchase price, or lease concerning rentals), the amount of money owed by the debtor, the fact that the obligation is already due and demandable, and that a demand had been made by the creditor upon the debtor.
Please take note, though, that if the debt does not exceed P200,000.00 (excluding damages and interests), the creditor may file his claim before the Small Claims Court. Since the amount of the claim is relatively small and the relief prayed for is solely for payment or reimbursement of sum of money, it is the court’s policy in small claims proceedings not to keep these cases from dragging for long periods before finally being decided. Since the proceedings must be speedy, inexpensive, and informal, the Small Claims Procedure was made much more simple.
Foreclosure of mortgage
Foreclosure is a necessary consequence of non-payment of mortgage indebtedness. In a real estate mortgage, when the principal obligation is not paid when due, the mortgagee-creditor has the right to foreclose the mortgage and to have the property seized and sold for purposes of applying the proceeds to the payment of the obligation [See: G.R. No. 178367].
Foreclosure of mortgage may be done through a complaint filed in court (judicial foreclosure). But the creditor, if authorized by the debtor in writing, may foreclose the mortgage constituted on the property without going to court (extrajudicial foreclosure). By virtue of his granted authority, the creditor may take possession of the mortgaged property, and sell it in a public auction, subject to the requirement that notice of the sale has to be given by posting the same for not less than 20 days in at least three public places in the city or municipality where the property is situated [See: Sec. 2, Act No. 3135]. If no such authority to sell was granted to the creditor, then he has no other alternative but to resort to judicial foreclosure.
If the proceeds of the sale are insufficient to cover the entire amount of the debt in an extrajudicial foreclosure of mortgage, the creditor is entitled to claim the deficiency from the debtor [See: G.R. No. 175816].
Criminal action for violation of Anti-Bouncing Checks Law
The Anti-Bouncing Checks Law (B.P. Blg. 22) was passed for the specific purpose of addressing the problem of continued issuance and circulation of unfunded checks. B.P. Blg. 22 considers the mere act of issuing an unfunded check as a criminal offense [See: G.R. No. 191404].
Violation of B.P. Blg. 22 shall be punished by imprisonment for 30 days to 1 year, or by a fine of double the amount of the check, but in no case it shall exceed P200,000.00. Both such fine and imprisonment may, however, be imposed at the discretion of the court.
With such remedies that every creditor may avail of against the defaulting debtor, all such creditor has to do is to choose what he believes is most effective and convenient based on the circumstances surrounding his credit. Always bear in mind that unless creditors take action, many debtors will simply ignore their obligations. Precious cash need not be unnecessarily sacrificed, especially by business entities, simply because of difficulty in collecting debts. This holds very true when the money to be collected could be used on other business activities that would bring more money in the pocket.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding credit and debt collection laws, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
All rights reserved.
atty.
ask lng po ako nangutang ako sa lending ng 85k tpos my processing fee sila na 8500, peso po ang aking inutang NT dollar po ang bayad ko.binigyan lang po nila ako ng barcode good for 16months 5744nt dollar per mon.naka 1yr po ako ng bayad my remaining po ako ng 4months.umuwi po kasi ako ng pinas after 3yrs ngayon po hinahabol po ako ng lending nagpunta ako ako sa office nila humingi ako ng kopya ng kontrata napinirmahan ko ayaw nila ako bigyan. ang binigay lang nila kung mag kano po ang babayadan ko. 40k na remaining balance 15k na interest at 22k para sa collecting agency.tama po ba na gnun kalaki ang bayaran ko.my rights po ba ako n hindi bayaran ang interest ko kung ayaw po nila ako bigyan ng kopya ng kontrata ko at ang sabi kasi nila skin hindi daw pwede ilabas ang kontrata sila lang daw po ang my kopya nun
Dear Jane,
Kung nasa contract mo yung mga sinisingil sayo, kailangan mo mag-comply. Sana kukuha ka na ng kopya mo noon pang mag-sign ka, dahil doon mo malalaman kung meron ba talaga kayong kasunduan sa pagbabayad ng interest and other penalty charges.
Hindi porke hindi ka makakuha ng kopya ng kontrata ay wala na itong bisa. Valid parin contact kahit wala kang kopya. Pero ayon sa batas, hindi due ang payment ng interest kung hindi nasusulat ang kasunduan sa pagbabayad nito. So just in case magdemanda man sila ng small claims laban sayo balang araw, kwestiyunin mo agad ang interest charges nila on the ground na hindi nasusulat ang kasunduan ninyo. Sa ganun, mapipilitan sila ilabas ang kontratang pinirmahan mo, at kuhanin mo na ang pagkakataon para kumuha ng kopya at mapag-aralan ito ng mabuti.
-Atty. Arjay
Dear attorney,.
Tanong ko lang po may nautangan po akong 5-6 at nung bumagsak yung negosyo di ko na po sya nabayaran tapos ang sabi nya po ipapa NBI nya ako natatakot po ako kumuha ng NBI kasi baka pag nakitang may record ako damputin ako bigla gusto ko po sana kumuha ng NBI kasi balak ko po mag abroad para mabayaran ko po pagkakautang ko..at isa pa po nasa kanya po ang titulo ng bahay namin pero nakapangalan po sa papa ko yung titulo..kung sakali di ako nakapagbayad sa halagang gusto nya kasi tumubo na po eh.. mula 25k naging 200k na in 2 years makukuha po ba nya ang bahay at lupa namin…? Salamat po atty sa sagot.
Dear Kumil,
1. Hindi ka magkaka-record sa NBI dahil hindi naman criminal case ang hindi pagkakabayad ng utang. Kaya naman hindi ka din pwedeng damputin. Kumuha ka lang ng NBI mo, dahil walang pwedeng umaresto sayo.
2. Hindi nya makukuha ang lupa ng tatay mo. Maaaring nasa kanya ang titulo ng bahay nyo, pero hindi ibig sabihin nito ay nakasanla na ito sa kanya, dahil may tamang papeles para sa pagsasanla ng bahay nyo (Deed of Mortgage) na dapat meron sya.
-Atty. Arjay
good day po atty. same case po kay moola umutang po me worth 14k 12400 po nkuha due to bank charge. nkpag byad po me ng prolonged n 4200 ngaun po umabot n sa 25k utang q gwa dw po ng mga penalties. kinausap q po cla nung tumawag n bka pwede bbyran ko sila ng 10k next month at another 10k sa september at tapos n utang q kc sav q kung lagi nila llagyn ng interest ndi aq mttpos mabbaon aq lalo kc ung kausp q n po ng sav ndi dw po nbbwas ung 4200 n utang q sa utang q sa knila nadadagdgan p dw po. sa tingin nyo po san ko ito pwede ilapit kc ayaw po nila pumayag sa payment n gusto q slmat po. sana po mtulungan nyo aq ngun lng po me ng kautang kya ginagawan ko nmn po ng paraan n mabayaran sila.
Dear rica,
Kung ayaw nila pumayag, hindi mo sila mapipilit. Ang mgagagawa mo lang ay bayaran ang utang mo sa abot ng makakaya mo. Kung sa pakiramdam mo ay sobra na ang ibinayad mo, pwede mo yun maging depensa kung sakali man maisipan nilang magsampa ng small claims case laban sayo (basta ba intact lahat ng proof of payments mo para hindi ka mamroblema patunayan ang mga amounts na binayaran mo na).
-Atty. Arjay
opo nka save po lahat sa cp q ung picture ng resibo ko clear copy po with date and amount. as long as nag bbyad po b aq pede prin nila aq kasuhan ng small claims? wala nmn po palya monthly ng bayd q kagaya po ngaun ng byad me nung august 2 ng 2200 un lng po kac nkyanan ko. maraming slmat po at sana ng po matapos n ang utang ko kay moola. thank you po atty.
Atty,
Same po kami ng case si ROY.. nag send din sila ng txt message “METROPOLITAN TRIAL COURT Name: ___(confidential po muna sana)__
Expect our official commo to issue your COURT ORDER (JULY 28.2017) together with Sheriff and pnp to issue Writ of Preliminary Attachment to garnish your real and personal property at___(confidential po muna sana)_violation of Rep. Act 8484 under Article 315 and Art. 354
Please be inform for your voluntary surrender to avoid commotion at your area.
Call this no for the grounds and details
Prosecutor :OSCAR VILLANUEVA”
Nag search po ako sa SUPREME COURT ng mga UPDATED LAWYERS wala po ang name ni Atty. Oscar Villanueva…
Thank you po Atty…
Hi Attorney,
Nagcarloan po ako sa Global Dominion worth 175,000 last April 2017. Then nung September ibenenta ko po yung sasakyan sa isang tao pero tinabuhan po ako. May kulang pa po ang bayad ng tao sa akin na 150,000 na yun sana ang pambayad ko sa Global Dominion para makuha ko yung OR/CR ko. Ngayon po hindi ko na mahagilap ang tao. Aat ang problema ko pa is palagi nang nananakot ang collection agency ng global na ipapakulong daw ako at sasampahan ng kaso. Willing po ako magbayad pero pwede po ba sa kaya ko lang na amount? Nawalan po kasi ako ng trabaho. May batas po ba na nagsasaad na kailangan kung magkano ang monthly hulugan mo yun dapat? Salamat po.
Dear Jun Dumo,
Ang kontrata ninyo ng creditor mo ang maggo-govern sa amounts na kailangan mo bayaran at kung kailan mo ito dapat bayaran. Pag nakasaad sa kontrata nyo ang particular amount na kailangan mo mabayaran every month, yun ang batas sa pagitan ninyong dalawa, at dapat mo itong tuparin.
-Atty. Arjay
Atty,
Same problem Ihave with Moola Lending. Di pa naman ako nahaharass kaso di na ko makatulog dahil sa pag iisip san mo kukunin ang pambabayad sa kanila. Otiginal loan ko ay 7800 wherein 6500 lang nakuha mong cash. Tapos first time ko madelay ng payment, 15 days niala kong araw araw tinatawagan. Sinagot ko sila one time at nakipag usap amo kung pwede ireconstruct ung loan at hati hatiin sa maliliit na halaga. Ayaw niala. 120 per day ang interest habang di ako nagbabayad plus 700 late payment fee. Ginawan ko ng paraan ang 1800 na prolongation amount kasi daw maeexted daw ng 30 days, yun pala 15 days lang ang eextend so this july 30 ang due ko na ay 9800 pesos. Parang hindi makatarungan atty. San ko pupulutin yun. Nag aalangan akong magbayad ng kulang dahil bka hindi ibawas sa total amount ng laoan ko. Malapit na naman ang payday magdamag na naman magriring ang fone ko. Ayoko silang kausap dahil bastos sila at di naman sila napapakiusapan. Base sa mga kwentong nabasa ko dito about sa moola hinaharass pala sila at tinatkaot na aarestuhin, kahit hindi totoo yun ayoko mangyari yun kase baka malaman ng mother ko may sakit sya ayaoko syang mag alala. Ano pong pinakamaganda kong hawin ngayon atty?
Dear Roy,
You can actually ignore the harassment. Pero kung feeling mo talagang very intrusive na yung mga pagtawag-tawag nila sayo, then ireport mo na lang sa Financial Protection Consumer Department ng Bangko Sentral ng Pilipinas yung creditor mo.
-Atty. Arjay
Nangutang po ako ng 10,000 sa 56 po nong January 12 2018 nakapagbayad po ako ng 2000 at 4000 nong may at june.sa 12000 na tubo 6000 pa lang nababalik ko.so may 16,000 pa po sya.nakikiusap po ako na huhulugan ko sya kada sahod ko ng 1000 kasi yun lang kaya ko june lang po kasi ako nagkawork at pinapastop ko na po sana ang 20% interest.ayaw nya po pumayag na 1k lang ng 15&30 of the month ,file daw sya sa small claims court.ano po ba ang pinaka maganda ko gawin hindi po ba talaga mapapastop ang 20% interest.meron po ako pinirmihan na nangutang ako sa kanya.
Mary grace,
Kung kasuhan ka nya ng small claims case, then request the court na babaan ang interest rate mo. Dalawa lang naman ang pwedeng magbaba ng interest rate mo: it’s either your creditor or yung court lang. Kung ayaw ng creditor mo magbaba ng rate, then sa court ka mag-request if ever kasuhan ka na ng creditor mo.
-Atty. Arjay
Attorney pwede po bang mag bail na lang ang isang taong may warrant na bago pa sya ma arrest,sa kasong bp 22 ?salamat po.
Dear Dinah Padiernos,
Ise-serve muna sa akusado yung warrant, dahil dun sa warrant nakalagay ang recommended amount ng bail nya. So after nya ma-aresto, mag-file sya kaagad ng Motion for Bail sa court kung saan pending ang case.
-Atty. Arjay
Dear Maine David,
Pang may nakuha na sa bank account mo through garnishment, at kung sapat na yung nakuha para sagutin yung obligation mo based sa judgment ng court, maili-lift na yung garnishment sa account mo kasi hindi na ito kakailanganin.
Regarding sa 5-year period na tinatanong mo, ang ibig sabihin nito ay meron 5 years ang creditor from the time na naging final ang judgment para magpa-issue sya ng writ of execution. In your case, ang judgment ay inilabas ng court noong 2010, at ang writ ay na-issue noong 2014, which is still within the 5-year period na pinoprovide ng rules.
-Atty. Arjay
Atty.
Mayron po ako decided case na sum of money.
Meron na rin Writ, yun pong payroll bank acct ko na freeze na po due to court order.
Sabi sa kin ni sheriff, yun payroll kasi pumasok sa bank acct kaya napasama sa garnishment.
And told me, pag may nakuha na sa bank acct, hayaan ko na para lifted na( kahit payroll exempted sa execution?) Ano po ibig sabihin non?
Ask ko na rin po. Yun decision po rendered 2010, yun writ issued 2014. Kelan po ba masasabi na nag lapse na judgment ng 5yrs?
Thank you.