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.
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My cousin passed away with credit card loans. His husband was not aware of this and statements has been continuously being sent at their residence. Living all by himself at age 78, and a stroke patient for five years now, he has no means of paying the loans amounting to 1.2 million without interests. Everytime the bill comes, the husband’s bp rises and I’m worried for him. He is worried that the only property he has will be confiscated. Can you please help? We have already sent the credit card companies the death certificate.
To WHom It May Concern, an advice from you is truly appreciated. My cousin has an existing debt to the bank and he stopped paying for months now kasi ung source ng income eh nawala. Hindi naapproved ung visa going back to HK so wala siya pambyad. And now ung Atty daw nung banko is threathening him na pag hindi nagbayad eh ikakalat sa social media and idedemanda for loan fraud. Totoo po ba ito at tama ba ang proseso ng paniningil na ito? Hoping for your kind consideration.
Thank you!
Good day po. Gusto ko lang po sana magtanong. Regarding po ito sa salary bank loan ko last 2014 pa po. Ito po ay connected sa past employer ko at salary deduction po. Since hindi napo ako connected sa past employer ko ioover the counter ko po sana kaso umuwi po ako ng province at di ko agad naasikaso. Ngaun po my narecieved ako letter regarding nga po sa loan ko. Willing akong bayaran sya in installment kasi po di ko naman po kaya ang isang bagsakan ng 28k. Tama po ba na ifile ako ng case ng estafa dahil sa pag iisue ko daw ng bounced check e wala naman po ako iniissue at saka wala nman akong checking account. Tpos hinaharass nung taga law office ung mother ko dalhin sa baranggay which is di nman sya dapat ganunin. I can send u a copy of the letter para mapag aralan. Sana po matulungan nyo po ako regarding this. Isa pa po tinanong ko doon sa law office kung bakit ganun ang file ng case sa akin e hindi nman ako ng issue ng any check lalo na ng bounced check. Salamat po ng marami.
My brother made me his co maker in one of the lending companies they made me sign to post dated check before granting his loan. They med me open a chequeing account. Due to some problems with my bros work he werent able to send me the money for payment. So i werent able to pay. Now they are texting those people.who are reference of my bro threathening that they will file a crminal case. Will i go to prison for this? Since.i really dont have the money for.paying it? Please answer
Hi. My friend borrowed cash to me of P5000 & made a lot of promises to pay. I asked her to write a letter if when she will pay me the said amount. My habol mo ba ako? I badly nees your help . Thank you.
My cousin is living in london fir the past 6 years now and i received letters of unpaid credit cards which sge did not even applied for here in the phillipines .what would she do now to clear her name b ecause she diid not even see and used that card .the credit collectors are asking her to pay
Hi i want to ask if u have credit in lending company its cost of Php.7,000.00 and suddenly i don’t pay it for 3yrs it would be called estafa? Or he can they can file me a case? But now that credit is not exaclty 7k because i pay before some.reply please thank u.
hi sir, hingi lang po sana ako ng advice. mayroon po akong credit na naiwan halagang 15,200 sa isang taong asawa ng pulis na naka assigned sa malabon rtc. nung nawalan po ako ng work ininform ko po yung lender na maantala yung payment dahil po sa nawalan ng trabaho. nag agree naman po yung lender. natagalan po bago ako nagkaroon ng communication ulit sa lender dahil yung simcard ko po ay nasira at nawala yung contacts ko. that time umuwi po ako sa province and due to some issues nagka delay delay yung payment. Nung time na po na mag start na ako sa work and kukuha na ng nbi nagka hit po ako. so i asked the person in charged sa nbi and yun daw may case daw ako. so, ang ginawa ko po humanap ako ng way na makuha yung no. ng lender and tinawagan ko po sya immediately asking about the issue. sinabi niya po na nag file siya ng case which is estafa and may warrant of arrest daw po ako. wala po akong natanggap na subpoena o any documents kasi po nasa province ako nung nag file sya. nakiusap po ako na magpapadala po muna ako ng paunang bayad na 6,000 thru her BDO savings acct. and pinuntahan ko po sya sa malabon . yun po pinakita niya sa akin yung documents about sa case. nakiusap ako sa kanya na tulungan akong makakuha ng nbi kc di po ako makaka work at paano ko po sya mababayaram kung wala akong trabaho. inadvice nya po ako na magbabayad sa court ng 18,000 pero refundable naman daw yun pero hindi nga lang buo ang maibabalik. Ano po kaya ang gagawin ko? Salamat.
Totoo ba yun. Kapag nakakuha ka NBI makita nila nagfile sila sayo. Kinakabahan naman ako. Meron ako hindi na settle. Due to financial problem. Lalo na may binabayaran ako na utang na hindi naman sakin.
hihingi lang po ako ng advise may utang po ako sa credit card na hindi ko pa nababayaran gusto ko po sanang i settle ito ng installment pero nung nakipag communicate ako sabi ng collection agency nakademanda na daw ako at anytime dadamputin na ako , may mga tumatawag pa sa akin na mga police supt sila at may hawak na daw silang arrest warrant , tama po ba ang giangawa nila ang takutin ako ?
I am looking for some legal assistance for this problem. I conjured up my life savings P13M in 2010 to purchase silver metal from a Philippine business. As he requested, I paid in full in advance upon his commitment to deliver. He accepted my payment but failed, even refused, to deliver. He appears to want to file for bankruptcy and leave me penniless. Since the size of my order is more than ten times his reported sales for the year in question, he obviously did not report the sale on his AFS. I have evidence he withdrew about half of the proceeds of the sale to purchase items for his personal ownership.
I believe (but am not sure) a customer with an undelivered order for which he has fully paid, is an “interested party” in the corporation (like a shareholder) and is prejudiced by the removal of funds from the corporation (for the personal benefit of the CEO) which render the corporation unable to meet its obligations. Is this a valid argument?