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.
Good day, Atty.
Yung parents ko kasi nangutang ng more than 3 million. Agreed interest was 5% monthly, so almost 200,000 monthly dapat bayaran monthly for the interest. Admittedly, the need for the money was urgent during that time so my parents agreed on the set-up. Nakakabayad naman sila for the first few months but right now, they incurred several other debts to other people in hopes of paying this first debt. Gusto sana nila na mababaan ang interest kasi hindi na talaga kaya mabayaran because they almost have no source of income (given the other debts they have to pay monthly). I tried reviewing some cases relating to this, and nabasa ko na maraming cases na declared unconscionable ang interest rate na 5% and the Court of Appeals set it at 12% per annum (which is the legal interest rate), even with the presence of a contract.
My question is, will our petition for the decrease of interest be approved given the current circumstances?
Do I have an obligation to pay my parents’ debt, legally speaking?
Dear Mark Cruz,
i confirm that there are indeed instances when interest rates are declared by the Supreme Court as unconscionable, and reduces it to reasonable levels. There is a chance that the court will do the same in your situation.
You don’t have a legal obligation to pay your parent’s debt, unless you inherit such debt. Kung buhay naman parehong parents mo, hindi mo kailangang alalahanin ang pagbabayad ng utang nila (though nothing prevents you from paying for it voluntarily, if you want to help your parents).
-Atty. Arjay
Good afternoon po Atty.
May 15 taon na po ang nakararaan, ang aking pamangkin po ay nakautang sa 1 banko sa U.A.E. Bilang garantya po ay nag-issue siya ng tseke doon. Dahil sa pagbabago po ng trabaho ay nalipat po sya sa Singapore at di na po nabayaran ang utang. Hindi po siya makauwi sa dito sa Pilipinas dahil may tumatawag po sa amin na collection agent at sinasabi dadamputin daw po siya sa airport at ikukulong kung di makababayad ng utang. Di po namin alam kung ano ang maipapayo po namin sa aming pamangkin, sana mabigyan mo po kami ng payo. Maraming salamat po.
Dear Harry,
Since sa UAE nangyari ang pag-issue nya ng cheke, hindi sya pwedeng kasuhan ng violation of BP 22, o kahit anong krimen, dito sa Pilipinas. Sa batas kasi natin, ang criminal case ay isinasampa sa lugar kung saan nangyari ang insidente, kahit nasaan pa man ang offender. Kung wala naman violation sa immigration ang pamangkin mo, hindi totoong may dadampot sa kanya sa airport. Hindi sya dapat matakot umuwi dito sa Pilipinas.
-Atty. Arjay
atty hingi po sana kami ng tulong legally po kc di namin alam pano gagawin na iistress na po kmi sa naniningil na aeon credit smin..nakakuha po kc kmi ng tv sa kanila hulugan 12mos 1700 monthly kaso po due to hospitalization ng bienan ko di po kmi nakahulog sa huling apat na buwan.then netong mga nakaraan po nakatanggap kmi ng tawag n may warrant of arrest n daw kmi due sa kulang namin n apat na hulog na hindi namin nababayaran sa nagdaang mga buwan ano po ba ang pwede namin gawin nanakot po kc cla sa pagsasabing makukulong ang asawa ko knowing n willing nman po kmi i settle yung balanse tumawag kmi sa mismong aeon credit nakababa n daw ang papel po namin sa collectors ..gusto po sana namin mangyari n mismong aeon ang makausap at maka deal namin sa kabuuang kulang pa namin..may nakukulong at nagkakawarant po ba talaga dhil di nakapag hulog sa mga credit loan appliances na ganun salamat po
Dear alvin ruyana,
Based sa kwento mo, muka namang wala kang ibang kasalanan maliban sa hindi mo mabayaran ang utang mo (something na hindi naman talaga pagkakasala). Walang nakukulong ng dahil lang sa hindi makabayad ng utang, so hindi totoo na may warrant of arrest ka. In the first place, wala silang criminal case na maisasampa sayo para maging basehan ng pagi-issue ng warrant of arrest. Tinatakot ka lang.
Pero hindi ibig sabihin nito na ayos lang na hindi magbayad. Bayaran mo parin ang pagkakautang mo. Pero hindi mo kailangan ma-stress ng dahil lang sa mga sinasabi nilang makukulong ang asawa mo, dahil hindi totoo yun.
-Atty. Arjay
Hello po Atty. Arjay i have the same situation po kay Sir Alvin . kumuha rin po ako ng TV and nababauaran ko rin naman po sya almost 15k na po naihulog ko at ang utang ko lang po ay 18k. ang masaklap po kasi nito nadelay po ako ng 1 day sa payment ko pero nakapag bayad namn po ako tapos po after 2 days may tumawag na akin na d padaw bayad ang account ko . pinacheck ko po at binigay ko ung SI # kung saan ako nag bayad . hanggang sa sunod sunod na po monthly ako nag babayad at palgi narin po sila nagfofollow up. un po pala noong nagbayad ako ng1 day delay of payment ko nakaincurred na daw ng interest at inooffset nila sa next payment ko kaya lumalabas na kulang kulang ang ibinabayad ko sa kanila monthly.. saka ko nlang nalaman na after ng ilang bwan nung nag inquire ako kung magkano ang balance ko at tumaas ng tumaas daw kuno ang interest ko dahil sa kulang daw ang bayad ko. halos 2 months nlng po ang kulang kosakanila mga 3500 nlng siguro pero nagulat po ako ngaun umaabot na ng 8k ang utang ko. at ngaun tinatakot po nila ako napapadalhan ng demand letter at mag fifile ng case against my name. d ko rin pa po kayang mag bayad since buntis po ako at malapet na manganak. ano po ang gagawin ko.
Hi po Att. Need ko lang po ng help nyo, humiram po ako sa Moola ng 10k pero ang lumabas lng sa ATM ko ay 7200 tapos po ang bayad ko ay 10400, wala nman pong problema don ang kaso nung due date ko na admit po ako sa hospital so hndi po ako nakabayad ng 3days kasi nasa ospital po ako, nakikiusap po ako sa knila na bigyan nman nila ako ng kosiderasyon at i waive yung penalty, yung penalty po kc bglang umabot ng 2,010 hindi ko po alm kung bkit gnon agad kalaki at tumatawag po ako sa knila pero walang sumasagot voice mail lang. Nag bayad na po ako ng 10400 tapos may babayaran ult ako ng 2010. Ano po dapat ko gawin? 🙁 maraming salamat!
Dear Barry,
Dapat alam mo kung ano ang interest rate ng loan mo, pati mga charges and penalties, at kung every kelan ito tumutubo (malay mo daily pala kung tumakbo ang interest nyan instead of monthly). Once malaman mo, saka mo kompyutin. Better yet, manghingi ka ng statement of account sa creditor mo, or manghingi ka ng payment history para makita mo kung paano lumaki ng ganyan ang utang mo.
-Atty. Arjay
hello, nagloan po ako sa mookla and sabi po pede nman ma-prolonged as long as on or before dapat ng due date mabayadan ung loan or ung penalty para po ma extend then aun po ang ginawa ko then the next month maaga pa ng due date nabayaran ko na. Kaya lang po nagsesend sila ng message na may balance pa ko na loan sa kanila and hirap din po sila pag contact kasi sa sis q po sila tumatawag and nasa school po sya and ako po nag abroad na then tinatry sila tawagan ng sis q para malaman kung saan po galing ung unpaid loan unfortubately hirap sila tawagan kaya po nag eemail ako. nagemail na po ko sa lahat ng dept nila pero wala po ako nakuhang sagot. Ang huling loan ko po is 6k nung may 25 2017napenalty po ako ng june 24 and bayad na po pati penalty nung july 2nd week. Ngaun po nung nakausap na sila ng sis q savi dahil daw po sa penalty kaya naging 5k na this apri 2018 makatarungan po ba yon?thank you po.
Dear maria,
Para malaman mo kung makatarungan yung amount, dapat makita mo kung paano kinompute yung balanse mo, taking into consideration all the interest, penalties and charges na napagkasunduan ninyo ng creditor mo, pati yung payment history mo, at kung paano inapply yung mga previous payments mo. Without complete details, hindi natin yan mabibigyan ng kasagutan.
-Atty. Arjay
Hi po, good day! I have a question Po…. meron Po kase akong pagkakautang sa isang lender na nag55-6, actually Hindi ko Po kilala ang identity ni lender kase ayaw Sabihin nung tao na nag guarantee sken. Si guarantor Po ang laging naniningil sa amen Pero yung way Po ng paniningil nila ay scandalous. Pumupunta Po sila sa bahay at gumagawa ng eksena… kinakalabog Po ang gate namen at nagsisigaw palagi. Medyo delayed na Po kase kami nag payment kase nawalan Po ako ng work pero may napagkasunduan naman na Po kaming payment scheme pero grabe Po sila maningil. Hinihingi ko din Po yung real name nila ng Nanay nya kase sabi nila sila ang nag guarantor sken, pero ayaw nila ibigay sken. Natrauma na Po mga anak ko s knila. Meron Po ba akong right na magcomplain against them? Grabe Po kaseng pamamahiya ang ginagawa nila. Appreciate your advise Po. Thank you.
Dear Sheila,
Ireklamo mo sa barangay, at ipa-blotter mo na rin doon yung mga insidente ng pang-iiskandalo sayo nung guarantor na nanggugulo sa bahay nyo, at doon mo din sa barangay subukan manghingi ng proteksyon. Though based sa narration mo, muka namang wala pa naman silang case for collection na isinampa laban sayo, pero kung sakali mang umabot kayo doon, hindi pwedeng hindi idi-disclose ng creditor yung identity nya. Saka dahil sa may kasunduan kayo regarding payment scheme, gawin mo yun depensa na hindi ka nila dapat kolektahan ng hindi naaayon sa terms na pinagkasunduan ninyo. Sana lang ay nai-dokumento mo itong napagkasunduan ninyong payment scheme.
-Atty. Arjay
Thank you very much po sa reply Atty. Arjay! Pumunta po ako sa Barangay upang magsampa ng reklamo at magpablotter pero sa pagsasalita po ng officer doon ay pinapanigan nila yung mag ina dahil magkakilala po sila kaya bias po sila. Hindi nga po nila dinokumento ang reklamo ko. Nagdemand po ako na magkita kami sa Friday ng kabilang partido dahil sabi ko po, Hindi ako magbibigay ng bayad kung Hindi ibibigay sa akin ni guarantor ang full name nya at ng Nanay nya. Kilala ko lang po kase si guarantor sa alias nya… Hindi ko po tlga sya ganun kakilala pero alam ko po Kung saan sya nakatira. Sabi ko po sa officer na karapatan ko din po makuha ang details ng katransaction ko, tama po ba Atty? Para din po sa seguridad namen at makapag Sampa ako ng blotter sa nearest police station. Third time na po nila ginawa ang pang eskandalo sa bahay namen at Malala ang pang huli dahil naglabasan na po ang mga kapitbahay namen dahil sa pagsisigaw nya At pinagsisigawan ang tungkol sa utang ko… maaari ko din po b sya ireklamo o kasuhan dahil dito? Maraming Salamat po and more power.
Dear Sheila,
Maaari. Pwedeng ka magkaso ng alarms and scandal kung gabi nya ito ginawa at nakakapang-bulahaw ang ingay nya. Or pwede din slander/oral defamation kung sa tingin mo ay nasira ang puri mo or napahiya ka sa mga tao.
Since alam mo naman kung saan sya nakatira, pwede mo sya ihabla sa barangay kahit gamit ang alias nya. Once na hindi kayo magkaayos at makakuha ka ng “Certificate to File Action” mula sa barangay, iakyat mo na sa piskalya ang reklamo mo laban sa nanggugulo sayo.
-Atty. Arjay
Hi po, ask ko lng po. My hnram po ako s moola lending n 3k, since dko po mbyran ngbbgay pra ako ng prolongation fee n 1200 every month at bukod dun my interest p everyday hnggang s mlaman ko po n umabot n ng 15k ung utang ng dhil s interest nla. Ngayon po ngtxt cla skin n ppnthan po nla ung brgy nmin at ippatwag ako pra s meeting. Ano pong ggawin ko? Wla nman po clang payment plan n bnbgay. Hingi lng po ng advice slmat po.
Dear Rachelle Herrera,
Kung nagreklamo sila sa barangay at ipatawag ka nila, mas maigi kung pupuntahan mo ito. Susubukan lang kayong pag-ayusin ng barangay. Kung wala silang payment plan na binibigay sayo, ikaw na ang magpropose ng payment plan mo, lalo na at ikaw naman talaga ang nakakaalam kung hanggang saan lang ang kaya mo. May tatlong hearing schedules dapat kayo diyan sa barangay, so kung makakapag-work out kayo ng compromise bago matapos yung mga scheduled hearings nyo, mas mabuti.
-Atty. Arjay
Good am po.Nakautang po ako s 5-6 noong 2016 pero hangang naun may balance pko including the 20%interest n mga 20k.tinatakot po ako n guguluhin ako s work ko at kakasuhan ako ng estafa at pinababayaran din ung 2ginarantoran ko n tumakbo.ako po pwd ko gawin.salamat po
Dear Reene lopez,
Kung totohanin nilang manggulo sila sa work mo at i-harass ka, isumbong mo na lang sa Financial Protection Consumer Department ng Banko Sentral ng Pilipinas yung creditor mo. Kung kasuhan ka man ng estafa, kung wala ka namang bouncing check na ni-issue, hindi ka dapat mag-alala.
-Atty. Arjay
Good afternoon po tanong ko lang po kung mgserve ng arrest warrantkung may subphoena at hindi nkaattend ng hearing dhil s kasong bp 22 bouncing check law. Ang halaga lng ng utang sa lending company ay 28k?
Dear Lavinia Dasmarinas,
May kapangyarihan ang korte na mag-issue ng warrant of arrest sa BP 22 cases, lalo na kung nirequire ng court ang presence ng akusado at hindi ito nag-appear. Hindi mahalaga kung magkano ang value ng check.
-Atty. Arjay
Dear atty.
Good day po
Ask ko lang po kasi me kaso daw po ang husband ko na estafa.nag loan kmi sa lending ng 30k.pro ang bbyran namin bale 60k. Naghuhulog na kmi ng ilang buwan thru check tpos nung dec.po nfi ko po npondohan ang tsek kc that time po tinakbo ko eldest ko sa i mean emrgncy kc dumudugo ilong niya at pinaatwag ako sa school.nkausap ko lendinh at ndi na nga po tseke ang usapan na.bale balewla na yun..nagbigay sila ng bank acct na sa knilang company mismo..so dun napo ako naghuhulog til feb..ng akinse.then feb21.inatake po sa puso asawa ko nag 50/50 po so ndi po ako nkahulog nun sa lendinh kc need operahan asawa ko.inabot kmi ng 16days ..march na siya nklabas at ndi din sya agad nkablik sa work..june bumalik sya sa work at sinisingil na kmi ng lending so i sent a hospital bill at mga proof na nahospital asawa ko.At ndi pa siya mkakapagbyad dhil nov din po hindi na sya ulit nagwork na dahil dinala ko ulit sa hspital dhil inatake nanaman siya and dpt icu sya ulit kaso nkiusap ako na bka pde meds nlang muna kc ndmi na din nmin bayarin…so to cut it short 10mos o a year din sya ndi nkapagwork…
Neto lang po ulit..so ang tanong ko po..pde po nila kasuhan ang asawa ko ng estafa?me kausap dti asawa k osa office ng lending..bale nakapagbayad ba kmi ng mga 15k.bgo siya inatake nun ss puso at dun na po kmi ss bank acct nila naghuhulog..me nagsbi lang smin na me pmunta daw n police sa brgy.me dlang letter kc ndi dw nag appear asawa ko eh wla namn kming alam nagulat lang din kmi.Yung kausap dti ng asawa k osa lending hindi na po na reply..Ano po dpat nming gawin??malaki din po inabot ng operation ng asawa ko sa puso.almost 1M din .utang din po yun…sna po matulungan nyo po kami…
Dear Elise segador,
It’s possible na kinasuhan nila ang mister mo dahil sa check na hindi nya napondohan, dahil kung purely utang lang ang nangyari, walang estafa na pwedeng ikaso laban sa kanya. Sadly, hindi naman talaga mahalaga para sa karamihan ng mga creditors kung ano ang dahilan kung bakit hindi makabayad ang debtor, basta ang mahalaga ay mabayaran dapat ang pagkakautang sa kanila.
Kung wala kayong natatanggap na demand letter and/or notice of dishonor mula sa creditor, pwedeng gawing depensa yon ng mister mo kung talagang kinasuhan sya ng estafa.
Hindi ko din masabi kung anong letter yung bitbit nung pulis noong pumunta sya sa barangay nyo. Di naman kasi bahagi ng trabaho ng pulis ang magdeliver ng demand letter o notice of dishonor. Kung pina-receive ng pulis sa barangay yung letter, subukan mong manghingi ng photocopy.
-Atty. Arjay