Perhaps you’ve heard someone making threats to file criminal cases against debtors who fail to pay. On the other hand, perhaps you’ve heard about the rule that no one can be imprisoned simply because of a debt in the Philippines. The prohibition against imprisonment for a debt is a basic right enshrined in no less than the Philippine Constitution. Article III of the Constitution reads:
“No person shall be imprisoned for debt or non-payment of a poll tax.”
REASON FOR NON-IMPRISONMENT
The Supreme Court explained the rationale for this prohibition in the case of Lozano vs. Martinez:
. . . Viewed in its historical context, the constitutional prohibition against imprisonment for debt is a safeguard that evolved gradually during the early part of the nineteenth century in the various states of the American Union as a result of the people’s revulsion at the cruel and inhumane practice, sanctioned by common law, which permitted creditors to cause the incarceration of debtors who could not pay their debts. At common law, money judgments arising from actions for the recovery of a debt or for damages from breach of a contract could be enforced against the person or body of the debtor by writ of capias ad satisfaciendum. By means of this writ, a debtor could be seized and imprisoned at the instance of the creditor until he makes the satisfaction awarded. As a consequence of the popular ground swell against such a barbarous practice, provisions forbidding imprisonment for debt came to be generally enshrined in the constitutions of various states of the Union.
This humanitarian provision was transported to our shores by the Americans at the turn of the century and embodied in our organic laws. Later, our fundamental law outlawed not only imprisonment for debt, but also the infamous practice, native to our shore, of throwing people in jail for non-payment of the cedula or poll tax.
In other words, no one can be compelled to pay a debt under pain of criminal sanctions (estafa is a different matter). No one can be imprisoned for non-payment of debt. The remedy of the creditor is civil in nature.
Let’s examine some laws that were questioned, albeit unsuccessfully, on the ground that these laws violate the constitutional prohibition against non-imprisonment for debt.
BOUNCING CHECKS
Bouncing Checks Law (BP 22) does not punish the non-payment of an obligation. The law is not designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them in circulation. Checks have become widely accepted as a medium of payment in trade and commerce, and if the confidence in checks is shaken, the usefulness of checks as currency substitutes would be greatly diminished. When the question was resolved in 1986, it had been reported that the approximate value of bouncing checks per day was close to 200 Million Pesos, thereafter averaging between P50 to P80 Million a day. (Lozano vs. Martinez)
TRUST RECEIPTS
The same argument was raised against the Trust Receipts Law (Presidential Decree No. 115). The passage of P.D. 115 is a declaration by the legislative authority that, as a matter of public policy, the failure of a person to turn over the proceeds of the sale of goods covered by a trust receipt (or to return said goods if not sold) is a public nuisance to be abated by the imposition of penal sanctions.
It punishes the dishonesty and abuse of confidence in the handling of money or goods to the prejudice of another. The law does not seek to enforce payment of a loan. (Tiomico vs. CA)
CREDIT CARDS
Under the Access Devices Regulation Act of 1998 (Republic Act No. 8484), anyone who obtains “money or anything of value through the use of an access device, with intent to defraud or with intent to gain and fleeing thereafter” is criminally liable.
R.A. 8484 provides for a presumption: a cardholder who abandons or surreptitiously leaves the place of employment, business or residence stated in his application or credit card, without informing the credit card company of the place where he could actually be found, if at the time of such abandonment or surreptitious leaving, the outstanding and unpaid balance is past due for at least 90 days and is more than P10,000, shall be prima facie presumed to have used his credit card with intent to defraud.” We are still waiting for the test case on this.
- Twin-Notice Rule and Procedural Requirements in Employment Termination Proceedings - June 3, 2020
- When Travel Pass is Needed for Interzonal Travel during Community Quarantine - June 1, 2020
- Can Companies Compel Employees to Work during the General Community Quarantine (GCQ) and Impose Disciplinary Sanctions - May 29, 2020
Hello,
I hope you can answer my question, I do understand that no one can be imprisoned for non payment of debt but I would like to seek an advice about how I should handle my situation.
I have a loan for a samsung s6 edge and it was very unfortunate that I lost my job and wasnt able to pay the loan (current debt is 27k), I signed a letter before that i will pay on a certain date, I did pay but it wasn’t for the full amount. Now someone talked to me and said I have a warrant because of that. Prior to that call, I already asked the company asking for arrangement given my current financial situation but they did not acknowledge. Now the lawyer sent me an email stating that I need to pay the full amount of 2k until feb 29th otherwise, I will be arrested.
Hope to hear from you.
Good day, I recently got a smart postpaid plan. I used my credit card to pay the initial payment (already paid) and i did not opt to have the auto debit from my card. Now i have stopped paying my bills due to slow connection speeds as they have promised. Now i am being texted and receiving mail demanding me to pay with threats from a certain law office. Can you tell me my options?
Hi ,
Please advice on this. I borrowed money online. The 2nd time I borrowed I lost my job and wasn’t able to pay my debt. There was a letter sent notifying that they will file case to the court.
Until now I don’t know how to pay them.
Please advice .
Thank you!
My father has been arrested upon the demands of a credit Union for running delinquent on his loan. He faced a downturn in events some years back and took the loan to invest thinking it was going to go well. it did not. Now he has been arrested and a request that he pays a sum of about $15000 (that is the amount if converted from my country currency). This amount has risen Twice as much because of interest.
They request about $10.000 before he is released if not he shall be sent to jail awaiting trial.
My question is do they have the right to do so? is this legal?
Goodd day po, I just really need an advice. Balik bayan po ako mula Taiwan. Nag loan po kami for placement fee sa isang lending company sa Malate. One year to pay po yung utang which is equivalent to 12 barcodes we need to pay in Taiwan. Kaya lang napauwi po maaga at 5 months lang po yung nabayaran ko so my remaining pa po na 7 barcodes. Pinuntahan ko po yung lending company before going home sa Davao para mapagusapan po kung papano at mgkano yung bayarin. Kaya lang yung collector di po ako binigyan ng exact amount rather tinakot pa po nya ako na malaki yung babayaran ko na penalty for 2 months missed payment. Sabi lang po nya around 70k kasi 10k plus daw po each barcode. We agreed to pay 5k monthly every 25th of the month. Nag pa unang bayad po ako 5k sa office nila December 2015. Pag uwi ko davao sinubokan po namin ng mama ko na bayaran January and February 2016 for 15k para po sana ma deduct yung penalty kasi advance yug payment. Kaya lang makulit po yung collector and want us to pay 35k remaining daw po, di na po daw xa magpepenalty sarado na daw po yun kaso gusto nya bayaran ko by February 29, pag di daw ako ng bayad may penalty na daw po yun. Di ko po xa maintindihan kasi wala na man po xang binigay na detalye kug makano nalang utang ko ..Walang.wala na po kaming pera ni mama. May maliit lang po kaming tindahan sa palengke na di naman po malaki yung kita. Kaya sabi ko po sa kanya na i.follow ko yung ano mang napagusapan namin sa office na 5k a month. Eh sabi nya magbayad daw po ako 15k this March 15, 2016 po..wala na po akong pera na ubos ko na rin kababayad yung nadala ko galing Taiwan. Pano po ba dapat ko pong gawin?
Nag stop payment ang friend ko ng credit card debt 2 years ago because he could not afford to pay it anymore. He has no income.More than 10,000 ang utang nya. Is there a way na ma settle ito in a way na hindi sya mahihirapan ng pagbabayad on a monthly basis?He is willing to settle it in good faith.
I am a public school teacher and my net pay is 3000 a month. Please help me,I received a summoned from the barangay yesterday due to unpaid debts worth 14000 that i required last june 2014..but due to circumstances i wasn’t able to pay the full principal amount and the 20% per month interest. So i ask favor from the creditor that i will pay the principal amount through installment basis but she didnt agree to the condition that i ask so..last june2015 i ask her to accept my partial payment worth 1000 but she refuse it. then Last December 2015 she told me that she will accept now partial payment for the principal. So on that month i gave her 1000 after that I never followed payment due to my husband has been fired out on that month.then i told to the creditor about the situation..Then Last March 2016 my husband got a job then i ask her that i will pay 500 every payday because the salary of my husband is 6000 but she refuse again so she went to the baranggay ask complaint about my debt.. so what shall i do?we will meet this coming thursday Apr.07,2016..,….please give ma an advice..it really helps me a lot .
Hi sir, gusto ko lang po sanang humingi ng advice. Ganito po kasi ngyari. Nakautang mama ko sa isang matanda last 1995, namatay din yung matanda in 1995. Unfortunately pati yung asawa ng matanda namatay na rin. Pero bago sya namatay, nabayaran na nya yung utang, buong buo. Ang last payment ng mama ko ay 35k. Kaso wala kming proof na nabayaran yung utang. Pero during that time, nakita ko na inabot ng mama ko ang bayad. I was 14-15 y/o during that time. Ang naging collateral ay bahay at lupa (hindi yung lupang kitatitirikan ng bahay namin). Ang mali ng mama ko, di sya humingi ng resibo or katibayan na binayaran ng buo.
Eto ngyn ang problema, after so many years, hinahabol na ngyn ng mga anak nung matanda yung bayad ng mama ko, ang gusto nila bayaran sila ng outright 50k and 5k a month for 60 months, as kabayaran daw na kmi ay umuupa sa bahay.
Yung tax declaration, without knowing, natrasfer na sa pangalan ng matanda nung 2014, pero this is without our consent, wala nga ring kming pirma doon, I don’t know kung paano nila natransfer yung pangalan ng ama nila.
Gusto nilang mangyari ngyn magbayad na kmi ng 50k sa May 12, 2016 and mgbayad ng 5k every month.
Please help sir. Thank you.
My friend has accumulated debt amounting to almost 500,000 pesos, Im out of the country and he is in Singapore right now, is it possible to file a case against him?what case? I only have the list of his debts and some txt message as evidence… thank you
GUD DAY..
SIR JUST WANNA ASK REGARDING SHARK LOANS…
GIVING ME 6 MONTHS TO PAY..LOANED AMNOUNT 80K…PESOS..
TAPOS SA 6 MONTHS 75K NAPO NABIGAY KO..IN WHICH HINDI KO PO NA HIT ANG 6 MONTHS MAFULLY PAID ANG 80K..BALI ANG TOTAL LOAN AMOUNT WITH INTEREST IS 120K LAHAT PO..
NGAYUN SABI NG LENDER..INTEREST LNG DAW PO LAHAT YUNG 75K NA NABIGAY KO..GINA BLACK MAIL PO NILA AKO..