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.
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dear atty,
atty. I have a friend who asked help from me about borrowing money. so ako po nag file ng mga documents ko po sa lending at ako pumirma ng check.after a year d ko po alam na d na nya napondohan ung check na ini ssue ko po. 2 weeks ago naka recieve po ako ng notice of arraignment sa court. nakita ko po na nag preliminary hearing po cla without me. wala po akong narecieve na mga documents or affidavits for the past 2 months. ang narecieve ko lang po is ung notice of arraignment na po this coming april po.ang plano ko po talaga is to settle. ang sabi ng iba wag na daw ako mag hire ng lawyer kasi mahal daw ang acceptance fee eh ang utang lang naman ata na d nababayaran is 35k. sa arraignment po ba papayag cla na wala akong lawyer? o makukulong po ako?
Dear cis,
The court will not allow you to be arraigned without a lawyer, pero mag-aappoint ang court ng lawyer mo from the Public Attorney’s Office so that the arraignment may proceed (but the appointment will be for that day only kasi wala ka pang ine-engage na sarili mong lawyer). Make sure that you attend on the scheduled arraignment (and all other hearings where your presence may be required by the court) para hindi ka ma-issuhan ng warrant of arrest. Without a warrant, hindi ka makukulong.
After the arraignment, the court will be referring your case to the Philippine Mediation Center (PMC) para pag-ayusin kayo ng complainant. Since you said you are willing to settle, then you may settle your case while at the PMC, para matapos na at hindi na umabot pa sa trial.
-Atty. Arjay
follow up question atty.
Can i talk personally to the lending company before the arraignment?
Dear cis,
Yes, you may. Nothing prohibits you from doing so.
-Atty. Arjay
dear atty,
nakalat po ung case ko po sa 3 branch. nung april 20 na reset po and i was able to talk with the complainant. sbi ko settle na lang po kmi. we agree in to terms pero wala pa po written agreement. may prelimenary conference po bung may 18 na reset po uli. meron po uli sana sa may 25 kaso d ako nakaatend kasi sobrang taas lagnat ng baby ko wala po maiwanan. so since nagpapasa na po ako ng requirements sa company mag inform po ako na d ako makaatend which is my fault. ang sbi po na reset po. kaninang umaga tumwag sa akin ung complainant ang sabi po may order po na may warrant na po ako at may bail na 6k. sbi nya d nya po napansin un. so i called the branch ang sbi po may warrant na talaga po ako. so kelangan ko po pumunta ng pao para mag file ng motion. i went to pao ang sbi d na cla humahawak ng ganung case. bukas po mag coconsult po ako sa ibp legal po. ang sbi po nung complainant na submit na daw po ung order and sbi asikasuhin ko na daw po within this week po. question ko po. maaresto na po ba ako anytime without me filing a motion to lift the warrant po?
Dear cis,
Unfortunately, since the warrant has already been issued, it can already be served upon you. If you will file a motion to lift the warrant, ihe-hearing pa muna yun to determine kung talaga bang dapat i-lift ng court yung warrant. Habang wala pang lifting, peede ka talaga ma-aresto in the meantime. Just in case that happens, your recourse then would be to post bail.
-Atty. Arjay
dear atty,
I went to court last tuesday. ang sabi ko po magbail ako. pinakita ko ung order sa fone ko po coming from the complainant. sbi sa court magdala ako ng mga requirements. so inasikaso ko po. noontime tapos na po ako ng halungakatin nila file ko po it ended up wala pala po akong warrant.sbi nila san ko nakuha ung order na document ko po sbi ko sa complainant kasi nag uusap na nga po kami for settlement before po.
Dear Atty. Arjay,
Meron po akong personal loan na may term na 36 mos. sa isang bangko. Nag-issue po ako ng 36 pd checks para sa bawat buwan ng hulog ko. Nakapaghulog na po ko ng 10 pero nagkakaroon po ako ng financial problem. Dalawang bwan na at hindi ko pa napopondohan yung checking account ko. Lumalabas na 2 months behind na po ako sa paghuhulog. Pwede na po ba itong pagbasehan ng kasong bp22 ng bangkong insyuhan ko ng PDC? Pagkakaintindi ko po kasi sa bp22, meron po akong 90days from the date on the check para mapondohan ang checking accnt ko at mag-clear yung check.
Maraming salamat po sa kasagutan.
Dear Benhur,
Pwede ka makasuhan ng BP 22, dahil obligado kang pondohan ang check sa due date. Dahil once ipa-encash yang cheke or ipadeposit ng walang pondo, talbog yan agad.
Baliktad ang pagkakaintindi mo sa significance ng 90-day period na sinasabi ng batas, dahil hindi ito tumutukoy sa period kung kailan ka dapat mag-pondo sa cheke. Ang 90-day period ay tumutukoy sa time kung kailan dapat ipa-encash or ipa-deposit ang cheke. Kasi pag lumagpas na ang 90 days from the date of the check at saka pa lang ipina-encash or ipina-deposit yung check, depensa mo yun against BP 22 pag dinemanda ka.
-Atty. Arjay
Hello po Atty. Pa help naman po please. May salary loan po ako sa bank wayback 2009 nag past due po sya. In 2013, I communicated (thru phone) with the bank for an update of my outstanding loan balance, he said that someone will call me to update. Then I received a call (I can’t recall the name) stating my loan balance. He stated my actual balance and mentioned that they will give me an amnesty or a discount if I could pay Php 30,000.00 within the specific period. He gave my loan details (loan #) and advised me to proceed to the nearest bank branch where I eventually made the payment for the said amount. I complied and made the payment. I was complacent at that time since it was a full payment. I never thought of asking for a certificate because I grew confident that I’ve already paid it.
I failed to secure a contract or agreement for the said amnesty/discount since I have with me the stamped receipt and thought that it was enough of a proof. Currently, nag request po ako ng certificate of full payment Pero nag insist pa rin po ang bank na i have still remaining balance kasi po wala daw po akong maipakita na agreement ng discount. May balance daw po ako which is compose of penalties and charges. Nagpadala sila ng SOA stating that my principal balance is 28k plus penalties and charges na umabot ng 200k. May ni require sila na one time payment of 50k para ma clear na ang acct ko po pero hindi ko po kakayanin ang amount. Wala na po bang way na ma post ang payment ko na 30k sa principal amount? What will I do po? Thanks
I need the certification for my employment in the bank po. Thanks po
Dear Lady1222,
This is water under the bridge, but you should have asked for a formal proposal from the bank for the availment of that amnesty. Most likely, you were just informed through that phone conversation that you have an option to avail of the amnesty that the bank is offering.
You also have to understand that there are thousands of other delinquent accounts that the bank is trying to collect from, so the frailty of human memory would work against you if you fail to document any concession that was given to you if the bank indeed agree to give you an amnesty. That seems to be what happened in your situation.
What you can do now is only to renegotiate with the bank regarding the terms for availment of amnesty (assuming that they are still offering it), if you really believe that you cannot afford the P50,000.00 one-time payment terms that they are offering. This now all depends on your ability to persuade the bank, as they have the right to refuse your proposed terms. It is so because the terms and conditions of the loan should have already been explained to you when you availed of such loan back in 2009, including the interest rates and penalty charges. Thus, the bank may always opt to stick with such terms and conditions that have already been agreed upon before.
You may ask the court for the reduction of interest down to the legal rate, but this would mean that you have already been sued by the bank. Not good. Though if it comes to that point, you might as well ask the court to reduce the interest rate.
It’s just too bad, you should have already been cleared of your obligation by now, but that did not seem to happen. Avoid litigation to the best of your abilities, so I believe that renegotiating your unpaid balance is your best shot right now.
-Atty. Arjay
Magandang hapon Atty. Arjay,
Meron po akong kaibigan na nangutang sa akin ng P500k. Mula ng magbayad sya ng 80k, hindi na sya nagpakita o nagparamdam. Balak ko na pong mag-file ng kasong estafa laban sa kanya. Kaya nga lang po hindi ko na sya mahagilap. Wala na sya sa tinitirhan nyang bahay sa Pasay.
Pag pi ba nag-file ako ng kaso at naglabas ng warrant of arrest ang korte, pwede bang ma-dismiss ang kaso kung hindi sya madakip sa lalong madaling panahon? Ilang buwan o taon po ba ang validity ng warrant of arrest sa kasong estafa?
Dear Karen,
Walang exiration ang warrant of arrest, pero kung hindi ito maiseserve within 10 days from issuance, pwedeng mailagay muna sa archives yung kaso mo (so hindi din naman madidismiss basta-basta ang kaso simply because hindi madakip ang akusado). Pero bago makapag-issue ng warrant of arrest ang court, kailangan pa muna dumaan sa preliminary investigation before the city prosecutor ang estafa case.
-Atty. Arjay
Good afternoon atty. Tanong ko lang po, kapag ba ang utang sa banko na four hundred thousand ay makapagpapakulong na sa umutang dahil hindi na small claims? Salary deduction po ang mode of payment at sa ngayon ay maglilimang buwan na akong hindi nakapagbayad dahil natanggal ako sa work. Posible kayang makulong ako sa halagang iyon?
Dear Teban,
Hindi ka makukulong dahil lang sa hindi ka makabayad ng utang. Kahit ano pa ang amount, kung wala ka naman cheke na ni-issue, or wala namang panggagantso na nangyari, hindi ka makukulong.
-Atty. Arjay
Magandang hapon Atty. Arjay,
Hihingi lamang po ako ng payo sa yo kung pwede.
Meron po akong existing personal loan sa tatlong magkakaibang bangko. Nag-issue po ko ng PDC sa lahat po ng ito. Ang ikinababahala ko po ay ang recent termination ko sa kumpanyang pinasukan ko sa loob ng 10 taon. Hindi ko pa po alam kung kailan ako makakahanap ulit ng trabaho at pwedeng ma-delay ng mahigit 3 months ang paghahanap ko ng work.
If worse comes to worst po na merong isa sa mga bangko ang mag-file ng kasong BP22 sa akin at ako po ay nahatulan sa ganung sala, pwede pa rin bang mag file ulit ng kaparehong kaso ang iba pang bangko na naisyuhan ko ng PDC? Hindi po ba sakop ito ng tinatawag na double jeopardy sa ating batas?
At paano naman po ang mangyayari sa kin kung sakaling sabay-sabay na mag-file ng kasong BP22 ang tatlong bangko? Mas hahaba po ba ang sentence sa akin?
Dear Anton Q,
Pwede ka parin mademanda ng BP22, at hindi ito sakop ng double jeopardy dahil magkakahiwalay na acts ang pag-iissue mo ng iba’t ibang cheke. Papasok lang ang double jeopardy kung, after mo mahatulan, idemanda ka ulit ng BP 22 for those same checks na inissue mo.
Pwede din mangyari na sabay-sabay silang magkaso. Ang parusa sa BP 22 ay pwedeng pagmultahin ka lang, or pwede din magsentensya ng pagkakabilanggo ng hanggang isang taon kada cheke. Discretion ng korte kung ano ang ipapataw na parusa once mahatulan ang akusado.
-Atty. Arjay
Magandang hapon atty,
Nakita ko po yun sagot mo tungkol sa writ of preliminary attachment. sAno po ba ang pagkakaiba nun sa garnishment? Pwede po ba yung magamit kapag may utang ka sa credit card? At may bond din po ba ang bangko bago makapgissue ng writ of garnishment ang korte?
Salamat po sa sagot,
Alex
Dear Alex,
Ang garnishment, bahagi na yun ng execution process after makakuha ng favorable judgment ang creditor mula sa korte. Ang garnishment ay ipinag-uutos ng korte para ang pera mo sa banko ay makuha ng sheriff pambayad sa creditor mo, or yung mga collectibles mo sa sarili mong mga debtors ay ibayad sa mga pinagkakautangan mo.
Ang preliminary attachment naman ay iniissue ng korte habang hindi pa tapos ang kaso, pero dahil sa kailangan bigyan ng proteksyon ang creditor sa posibleng pagtatago ng debtor ng mga property nya, pinapayagan ito habang dinidinig pa lang ang kaso. Para kung sakali mang makakuha ng favorable judgment ang creditor pag natapos na ang kaso, siguradong may mapagkukuhanan ng pambayad. Kung sakaling manalo man ang debtor sa kaso, ili-lift lang ng court ang Writ of Attachment na na-issue.
Pwede ang garnishment pag may utang ka sa credit card, pero dapat may judgment na sa kaso. Hindi na rin kailangan ng bond, dahil tapos na ang kaso na nagbibigay ng karapatan sa creditor para ipa-execute ang judgment.
-Atty. Arjay
Hello attorney,
Kapag po ba kumuha ako ng personal loan sa isang bangko at meron akong in-issue na PDCs sa kanila at hindi ko napondohan ang mga tseke, automatic po na ang charge sa akin ay BP22 and estafa agad?
Dear Ramon,
Automatic na may option ang creditor mo na magsampa ng BP 22 case, dahil pwede din naman syang magsampa ng collection case lang kahit meron check na involved (though mas madalas pinipili ng creditors ang BP 22 dahil criminal case ito). May estafa lang kung may halong pangagansto on your part kaya tinanggap ng creditor mo yung mga PDCs na inissue mo. Kung walang panggagantso, walang estafa.
-Atty. Arjay
Hello attorney,
Salamat po sa response. Yun pong mga post-dated checks nasa pangalan ko naman po at in-issue yun ng bangko kung saan matagal na rin po akong nagbabangko.
Matanong ko lang po kung may panggagantso ba na makikita ang creditor bank ko roon.
Lubos na gumagalang,
Ramon
Dear Ramon,
Kung ibabase ko lang sa mga narration mo, wala akong nakikitang panggagantso.
-Atty. Arjay
Good morning po,
Attorney, kapag po ba lumagpas na sa 90-day period ang in-issue na tseke sa bangko due to a personal loan, wala na pong recourse ang bangko kundi ang mag-file ng criminal case of estafa and BP22 laban sa isang borrower?
Natatakot po kasi ako dahil sa halos dalawang buwan na po at wala pa rin akong stable na trabaho. Kapag nakapag-file na po ba sila ng criminal case laban sa akin, ilang araw o linggo na lang ang bibilangin at makukulong na po ako?
Sana po mabigyan mo ng kasagutan ang aking mga tanong.
Salamat po.
Brian
Dear Brian,
Kapag lumagpas na ng 90 days mula sa date ng check bago ito ipina-encash or idineposit, mas mahihirapan nang iprosecute ka for violation of BP Blg. 22, dahil pwede mo nang i-deny na meron kang knowledge na walang sapat na pondo ang account at that time na nag-issue ka ng check. Kung hindi nila i-deposit or ipa-encash agad ang check once na mag-due ito, kasalanan na nila yun.
Assuming na may mai-file na BP 22 case against you, dadaan pa muna ito sa Preliminary Investigation sa prosecutor. Kung meron probable cause, saka lang ito maisasampa sa court, at ang court lang ang may authority na mag-issue ng warrant of arrest. Ibig sabihin nito, hindi naman kaagad-agad makukulong ang akusado once magkaroon ng BP 22 case. Kung ilang linggo ang aabutin, sobrang nakadepende na yun kung gaano kabilis mag-resolve ng cases yung prosecutor na nag-handle ng Preliminary Investigation sa kaso, at kung gaano din kabilis kumilos yung judge ng court kung saan ma-assign yung kaso, so hindi natin talaga kayang matantya.
-Atty. Arjay
Good morning po, Atty. Villanueva,
Sa tingin mo po ba pwede pag-aksayahan ng panahon ng isang bangko ang pagpa-file ng motion for a writ of preliminary attachment kung ang halaga ng utang sa isang credit card ay nagkakahalaga lamang ng P200k?
Hindi po ba gagastos pa ang bangko sa pagpa-file ng case na to at meron pa po silang bond na dapat na i-post bago ma-issue ang writ of attachment? Hindi ba’t lalaki lang ang magiging loss nila kung sakali?
Thanks in advance for your response.
Jon
Dear Jon Abergas,
Maaari yan. Lalo na kung lalabas sa mga credit and asset investigations ng bank na talagang may mga properties kang pwedeng hatakin, like vehicles, house and lot, etc. Totoong may bond na kailangan i-post ang creditor pag mag-aapply ng issuance ng writ of attachment, pero may option silang idaan na lang sa insurance (surety bond) para hindi mabigat sa kanila.
Pero kung hindi lalagpas ng P200,000 ang pagkakautang at ipinasok nila sa small claims ang demanda, mas malamang hindi na sila mag-apply for issuance ng writ of attachment para matapos agad ang kaso. Pero pwede parin ma-attach ang properties mo through a writ of execution just in case makakuha sila ng favorable judgment pag nadesisyunan na ang kaso.
-Atty. Arjay
Magandang gabi po Atty. Arjay,
Ilang follow-up questions lamang po:
1. Sakop po ba ng procedure on small claims ang pagpa-file ng writ of preliminary attachment? At sa ano pong paraan maaaring mapabagal ng writ na ito ang pagde-desisyon ng korte sa isang small claim case?
2. Sa small claims po ba, ang writ of execution po ba ay ibinababa ng korte para mapagtibay ang compromise agreement sa pagitan ng creditor bank at ng individual borrower?
Marami pong salamat sa oras at atensyon.
Dear Ramon,
1. Hindi makakapag-issue ng Writ of Preliminary Attachment sa small claims case, pero pwede parin maisama sa Writ of Execution ang mga properties mo pag nagkaroon na ng favorable judgment ang creditor mo.
2. Kahit sa small claims cases, pag na-settle ang kaso sa pamamagitan ng compromise agreement pero hindi tumupad ang debtor sa obligasyon nya base sa nasabing agreement, pwede mag-issue ng Writ of Execution ang korte upang ma-enforce ang obligasyon ng debtor.
-Atty. Arjay
Atty. Arjay;
Atty. may isang mag asawang nangutang sa amin nagpa finance ng kanilang quarry business ang halaga umabot ng 1million, may pinirmahan naman sila na natangap nila ang pera at nakapaunang bayad sila ng 150t kaso talbog ang cheke ang mahirap doon hindi sa kanila ang cheke, kung baga nanghiniram lang sila ng cheke at binayad sa amin. di rin namin nalaman na hindi sa kanila ang cheke dahil account number lang nakalagay.
Atty. ano maipapayo mo po.
salamat.
Albert
Dear ALBERT A. GADIANO,
Dito sa sitwasyon mo, maaaring pumasok sa estafa through false pretense ang ginawa ng debtor mo. Ito ay isang criminal case, kaya may kulong ito kung mapatutunayan ang swindling na ginawa sayo ng mag-asawa debtor.
Dahil sa limitado ang forum na ito upang pag-usapan ng mga detalye ng mga pangyayaring ikinokonsulta mo, maaari kang magpunta sa opisina namin para ma-evaluate namin ng mas maigi ang sitwasyon mo, at mabigyan ka namin ng karamptang payo sa kung ano mga kailangan mong gawin upang marecover mo ang nawalang pera mo.
-Atty. Arjay