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 Zen,
Hindi ka makukulong kung ang kasong isinampa sayo ay collection case lang (or small claims kung less than P200,000 ang sinisingil mula sayo). Pero gugustuhin mo bang matalo ka sa kaso ng hindi mo man lang naipepresenta ang panig mo?
Pwede kang magbayad sa account na binigay ng creditor mo, pero siguraduhin mong ma-preserve mo ang proof of payment mo, dahil yan ang gagamitin mong ebidensya sa court case mo para patunayan na nabayaran mo na ang sinisingil sayo at dapat nang ma-dismiss yung kaso. Kung partial payment lang ang magawa mo, magagamit mo parin yan as proof para patunayan na mas maliit lang ang amount na dapat singilin sayo kesa sa claim nila sa complaint nila.
-Atty. Arjay
Hi. Atty
Ask ko lng po meron po ba sinasabi ang batas kung ilang percent lng dpt ang tubuin sa isang lending company or may standard po ba na rate of percentage na pede lng dpt nilang tubuin? Paanu po yung masyado malaki tumubo?
Slamt po.
Dear Ely,
Walang batas ang nagfi-fix ng ceiling sa interest rate ng mga loans. Naka-depende ito sa usapan at kasunduan ng creditor at debtor. Kung feeling mo masyadong malaki ang interest rate, pwede ka mag-request sa court na babaan ang interest rate, pero kailangan mo parin makumbinsi ang court kung bakit ka dapat pagbigyan.
-Atty. Arjay
Hi po gud aftee…pwde po ba mghingi ng advice? Sir naka utang po ako last year sa moola lending tapos iyong loan ko ay 3900.. Pero na na receive ko nlng po ay/3700 nlng po dahil sabi nila sa processing pa daw…until nawalan po ako ng trabaho at binayaran ko nlng muna ung interest muna…hanggang ngkasakit iyong INA ko… Hindi na ako nakpagbayad…sa ngayon po lumubo ung utang ko sa kanila Naging 12500 na… Tama ba iyon sir na bayaran ko sila ng buo o 3900 lng talaga ung bayaran ko? Kasi subrange laki talaga na pinapatong nila sakin.tapos nag text pa sila sa akin na mangshe sheriff na daw xla kunin na daw nila ung mga gamit ko katumbas ng utang ko sa kanila..Tama ba na bayaran ko iyong 12 thou o3900 lng iyong byaran ko? Pls help me po salamt
Dear claire,
Yung loan agreement mo sa kanila ang mago-govern sa obligasyon mo, so just in case kaya mo na, pwede mong bayaran yung buong sinisingil sayo. Kung hindi mo talaga kaya bayaran lahat, wala ka naman magagawa, though pwede kang idemanda ng creditor mo ng small claims case. If ever mangyari yun, pwede mo hilingin sa court na babaan yung interest rate ng loan mo, at sana lang mapag-bigyan ka.
-Atty. Arjay
good morning atty. nakapag loan ako ng pera sa banko for business purposes ang nakalagay na rason. Hindi maganda ang takbo ng sari-sari store ko kaya wala pang isang buwan ay naging sira-sira store na ang small business ko na sari-sari store.Ang problema ko ngayon ay mag iisang taon na akong hindi nakapagbayad sa banko. makukulong na ba ako sa kasong estafa dahil naclose ang sari-sari store ko?
Dear Nida,
Hindi ka makukulong, dahil walang parusang kulong kung ang kasalanan mo lang ay hindi ka nakabayad ng utang.
-Atty. Arjay
Dear JIM,
Kung dahil sa paggamit mo ng false pretenses ay nakakuha ka ng pera (something na hindi naman dapat ibibigay sayo kung hindi ka nanloko), estafa yun. It does not matter kung magkano ang amount involved, estafa parin yun.
-Atty. Arjay
PHi Atty,
May nareceive po akong message galing sa Lending company online kung saan nakapagloan po ako pero due to financial crisis nagkasunod na na ospital ang mama ko at last month lang naoperahan ang anak ko di ko nabayaran agad pero nagkukusa akong magbayad paunti unti na umabot na sa 10k lahat naihulog ko. 15k lang po ang nahiram ko at 13,500 lang nakuha ko. Ngayon po minessage nila ako na kailangan kong magbayad hanggang lunes nalang July 16, 2018 ng halagang 16,879.60 pa daw pag di ako nakapagbayad magfifile sila ng case sa akin. Sa ngayon di ko pa kayang bayaran sa laki ng nagastos ko sa operasyon at nakapangutang pa ako sa iba. May paraan po ba na mapababa ang remaining balance ko at mag stop na yung daily rate na 10%? Mas lalo po akong nababaon sa utang pag ganito po. Salamat po sa reply.
Dear Atashin Prince,
Dalawa lang ang pwede lang magbaba ng interest rate ng utang mo:
1. Yung mismong creditor mo;
2. Court.
Mag-usap kayo ng creditor mo, at nasa sayo na yun kung paano mo mapapa-payag ang creditor mo na i-waive na lang ang interest sa utang mo, or at least kahit babaan lang. Kung hindi mo sya ma-convince, hindi mo sya mapipilit.
Just in case lang na i-demanda ka ng small claims case sa court dahil hindi ka makabayad, i-request mo sa korte na babaan ang interest rate mo. Pero kailangan mo parin patunayan ang posisyon mo at kumbinsihin ang court kung bakit masyadong mataas ang interest rate ng utang mo, dahil sinang-ayunan mo parin yung rate na yan noong ikaw ay kumukuha pa lang ng loan.
-Atty. Arjay
GOOD AFTERNOON ATTORNEY..
KAPAG BA HINDI MAKADALO SA HEARING ANG DEFENDANT SA KASONG HINDI NAKAPAGBAYAD NG UTANG NA PERA SA BANKO ON TIME AY MAKUKULONG NA? O AKO BILANG CO-MAKER ANG MAGSO SHOULDER SA REMAINING BALANCE NG TAONG UMUTANG NA AKO ANG CO-MAKER?
Dear TENAR,
Walang kulong sa hindi pagbayad ng utang, maka-attend ka man ng hearing o hindi. Kung ikaw ay isang co-maker, pwede ka habulin ng creditor para bayaran yung unpaid balance ng utang, pero pwede lang sya maghabol sayo kapag na-exhaust na nya lahat ng paraan para makakolekta sa debtor na ginarantiyahan mo ang obligation.
-Atty. Arjay
Dear Atty.
Nag loan po ako sa Moola Lending – online lending company ng 10k pero hindi ko po nabayaran dahil nawalan po ako ng work. Repeat loan na lang po yun. Then today po lumobo na sa 15,880. Wala po ako pinirmahang any document pero nag submit po ako ng ID.
Pwede po ba masira an credit score or standing ko?
Pwede po ba nila ako kasuhan?
Dear Tin,
Yes. Once isubmit na ng creditor mo sa Credit Information Corporation ang info tungkol sa unpaid credit mo, malalaman na ng iba pang financial institutions yung tungkol sa outstanding loan mo na hindi mo mabayaran. As a result, mahinirapan ka nang makakuha pa ulit ng loan, hindi lang sa Moola, kundi pati na rin sa iba pang financial institutions.
Yes. Pwede mag-file ang creditor mo ng small claims case.
-Atty. Arjay
Hi Atty.,
Question lang po.. I have a debt with Moola Lending amounting to 15k. Kaso due to financial problem (which is yun din dahilan ko kaya ako nag loan sakanila..) Hindi ko na po ito mabayaran agad sa ngayon. Last May po ako umutang sakanila, due na po iyon nang June last month. Mahirap po kasi bayaran ng isang bagsakan sa ngayon yung 15k lalo na po at may hindi inaasahang financial problem. Tinatakot po nila ako ngayon na kakasuhan nila ako at pupuntahan sa aking tirahan/opisina. Ano po ang kelangan kong gawin na ngayo’y wala pa po akong maipangbabayad sakanila? Salamat po
Dear Marielle0314,
Kung bisitahin ka man nila, walang problema basta’t magalang sila at hindi ka iha-harass. Kung maayos sila na bumisita, then makipag-usap ka din ng maayos, dahil dapat nyo naman talagang pag-usapan na lang yan ng hindi na lumaki pa lalo. Pero kung i-harass ka, then isumbong mo sa Financial Protection Consumer Department ng Bangko Sentral ng Pilipinas yung creditor mo.
Kung kasuhan ka man nila, pwede talaga nila yun gawin. But for your peace of mind, small claims case lang ang pwede i-kaso against you, at hindi ka makukulong kahit pa matalo ka.
-Atty. Arjay
Good evening po. Nakatanggap po kami ng summons from Makati Trial Court.
Last Dec. 2017 nakapag loan po kami sa 99lending. online po.
4500 po nakuha namin at ngayon po ay umabot na ng 11,900 dahil may tubo po syang 100 per day.
Hindi po namin naibalik agad ang bayad dahil nagipit po talaga kami.
Ano po kaya ang dapat naming gawin? nais po naming makipag areglo na hnd po nmin kaya bayaran ng buo. pero by installment basis po kaya po namin matapos lng po ang utang. Any advice nmn po please. salamat po.
Dear jerrylyn aran,
Kahit nasa court na ang kaso mo, isa sa mga stages ng proceeding ay ang tinatawag nating “mediation”, kung saan irerefer ng court sa Philippine Mediation Center ang case para pag-ayusin kayo ng creditor mo before kayo magtuloy sa trial. Since ikaw na mismo ang may sabi na willing ka makipag-areglo, pwede mo yun gawin while the case is undergoing mediation. Bibigyan kayo ng pagkakataon makapag-usap ng creditor mo during the mediation, at depende na sa pag-uusap ninyo kung makakapag come up kayo ng terms na acceptable sa inyo pareho. Give and take lang yan, at sana makakita kayo ng win-win solution sa problema nyo.
If the mediation is successful, then good for you, dahil successful mong naareglo ang kaso mo. Pero kung hindi successful ang mediation, at pareho kayo ng creditor mo na matigas at ayaw magbigayan, then that’s the time na babalik sa court ang kaso at yung judge na mismo ang didinig sa inyo.
-Atty. Arjay