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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Gusto ko lang po magtanong kung tama ba yung ginagawa ng isang collection agency. Pang huling bayad ko na lang sa credit card dapat nung March 2010 kaya lang di kami naka pagbayad sa dahilan na di pa ako naka pagtrabaho muli mula nun na retrench mula 2009, pero kahit paano nakaka bayad naman kahit nahuhuli sa petsa. Nitong marso hanggang hunyo medyo nahirapan lang talaga, pero naka bayad kami ng limang libo sa kanila at natira yun mahigit isang libo na interest daw yun sa limang libo.
Ngayon sinabi na namin na magbabayad kami bago matapos itong buwan ng hunyo, pero napakasama ng mga salita na binitawan samin ng collection agency sa telepono, keso sasampahan daw kami ng kaso na breach of contract; ipapapublish daw nila ang pangalan namin at marami pang ma-aanghang salita. Alam namin na nahuli itong pang huling at final na bayad pero sa ulit, nakapagbayad din ng mahigit sa kalahati na hinihingi nila. Tama ba itong ginagawa ng collection agency at kung hindi, saan kami puede dumog para makapag-reklamo.
Maraming salamat po.
Hi po. Strategy lang nila yan, lalo na kapag nasa collection agency na. For reference, please read: https://www.ecomparemo.com/info/7-secrets-credit-collection-agents-dont-want-you-to-know/
If the so-called “law office” or collection agency proposed options for payment, pero hindi mo pa rin kaya yung payment options na binigay nila tapos you proposed the amount na kaya mo ihulog sa kanila monthly, can they still pursue litigation? Kahit nakikipag usap ka na pero ayaw nila pumayag sa amount na kaya mong hulugan?
Hi,
I owe a certain bank payment for a salary loan. I understand what the blog said about not being imprisoned but what about taking of properties? I saw from the link that you quoted the bill of rights to support this. However, the latter mentions, “… no one can be deprived of life, liberty, property without due process..” or something like that.
Question is, can they really take properties even if they are willing to go through all the legal proceedings? What can we do, too, as consumers who have somehow taken steps to pay but just cant pay the full amount due to sudden changes in circumstances that affected our capability to pay?
i have a transaction posted on my credit card but this transaction is invalid.
I make a letter of dispute on the said transaction. This transaction is a miscommunication
as far as know where talking about the free platinum card that they offer me and i will receive a
voucher gift. He sighted that they offer a lifetime membership amounting 3997.50 and he told me that i have no obligations to pay this in full and this amount is zero interest. And i will receive a call again to confirm that amount.
He get all my details in my credit card and without worry i gave this because i thought i talked a person from the bank.
In short he use my card to pay online the membership fee. that day. And i dont received a call from them
Hope you could help me
Hello,
I am a single proprietor and I have a bookkeeper. However, the bookkeeper did not pay all my contributions for specific months so I paid all the discrepancies during the business permit renewal. Can I sue my bookkeeper for anything? The discrepancy is around more or less 30thousand pesos. I would highly appreciate your reply.
Thank you so much.
hello there,
i just wanted to know the best and legal way for me to get the money that was borrowed to me by an OFW who is based in S. Korea. I have been promised countless times and even sent me a copy of her drivers license, alien reg card and a promise to pay letter but with no good results.
I know that no one gets imprisoned because of debt, but would it be possible to have that person deported from S. Korea for non-payment of debt?
(The money borrowed amounted to P250k that’s why it concerns me a lot)
Your response will truly help.
Mishy
I have an outstanding loan from a Financing Company. This is my second time to avail of their loan services, but due to some unavoidable circumstances I failed to pay all the monthly amortizations via PDCs I have issued to the company. Thus, I was informed that a BP 22 case has been filed against me. I haven’t received any subpoena or warrant from the court since I moved to another residence. Mails concerning my outstanding loan from the financing company were either directed to my mother’s residence or to my husband’s office mostly threats that they would be publishing my picture on the newspaper. Just recently, a letter was delivered at my mom’s residence stating that should I fail to make arrangements with their office within a week upon delivery of the letter, they would be posting my picture in two leading newspapers for four consecutive weeks (a sample for said notice re: pending BP 22 case with my picture has been attached). Is this really possible? And if a case has been filed against me, should I not make arrangements with them in court and not in their office? I really need your advice on this.
Thank you.
I was required to issue post dated checks before I was granted a personal loan by a bank. After some payments made, I started defaulting not by intention but because I no longer have sufficient financial capacity to pay at that certain time and the PDCs I made started bouncing, can I be charged with Estafa or BP 22 and imprisoned?
I hope I can have a reply
Thanks.
same situations
same here
Yes. Dahil yan ay may criminal charges
same situation po tayo,ano na po nangyare sayo?
hndi po aq pinalad s ibang bansa at napauwi aq. hndi q po alm san aq kukuha ng pambbyad.. ano n po mangyayare?tnx po s makakasagot
Hi anung bank sayo??
Hi po! Same here, I’m also a defaulter in UAE. May tatlo po akong credit cards na hindi ko na nabayaran nung napauwi ako d2 sa pinas dahil kinancel ng employer ko ung visa ko ng hindi ako aware, ang ending airport to airport lang ako. To cut the story short, dami pong nagsesend ng emails puro mga threat at nagsesend din sila ng message thru social media sa mga relatives ko. Ngaun gusto ko po lumabas ng bansa pero natatakot ako na baka ihold ako sa immigration.
same situation here,.. my I know what happen?? any advice..,,
May I ask what happen?cause I have same situation. May I kindly get your advise pls
Hi,
I want to go to law school; however, i realized that it will be useless since I discovered that I have an outstanding balance with a credit card company. I used to pay it 6 years ago, but when i noticed that my payment has not been deducted in a monthly period I communicated with the bank and I was threatened and being compelled to pay the remaining balance. Anyway, I stopped paying but I haven’t received any call or mail from them given that I did not change my address. Nonetheless, when I was about to obtain a car loan from a different bank I was denied due to the fact that they discovered that I have an outstanding balance of more than 100 K.
My question is, just in case, i finish law school and pass the bar will the SC allow me to take my oath? What will be your advice?
Thanks.
kiko
just pay your debt.
What if you still haven’t paid your debts and yet, younare about to undertake the oath? Should SC prevent you from taking the oath? Thanks.
same din anu po ang ginwa ninyo tanx po…nid help po
Im a co.maker and i have the same issue.. can we get an answer please?
Hi wat if po as ofw nglending ng money then s dami po ng pinpirmahan ng lending agency at kapit sa patalim n rin d n po halos nbasa ung terms and condition ng lending compny, s dami ng dpat asikasuhin sa agency. Nakaalis po ng bansa pero unfortunately ngkaroon ng global crisis at 6mos lng ung nbyaran , pinauwi ng compny dahil sa pngyyari ngkroon ng separation pay n 1 month salary at gnamit nya pgbyad s remaining balance pero d enough pra mbyaran ng buo u ng remaining so pg uwi nya ng pinas ngreport xa s agency at cnbi n pinauwi cla cnbi nya n ang remaining nya ay 12k NT dollar pero kinonvert nila s peso kya lumaki nging 21k peso eh jobless xa wala work almost a yr ngulat n lng xa kc nging 100k peso n utang nya hnggng d nbyaran my kaso po b ang gnun?thanks po sana po msagot nyo po salamat
Thank you po for your advice.
I understood (from the link you provided) that the estate is the only recourse of creditors against debtors that have passed away. If this is insufficient, could the creditors legally have basis to go after the children and demand payment?
hi..i am one of the credit card user i voluntarily stop payment them because i observed even though im paying minimum amount my debt to them has increasingly and in multiple times.I decided not to pay them for them to stop my credit card and im willing to pay them to the extend of my only debt without interest.its been a 3moths i ignore all their calls and text.But as of now i may not be able to pay them in full but in installment.May solution po ba sa gusto kung mangyari?sa tingin ko kasi bayad ko na talga ang utang ko sa kanila ang sinisingil na lang nila sa akin is yung mga finance charges at anuual fee nila.
hi wellah, i have the same issue. i am asking them to waive my late fees sana and make payment arrangement throguh installment.
Hi! Creditcard issues din po ng asawa ko ang problem ko. Lumobo na sa P51k ang utang as of this writing coz that is what was stated on the letter from a law firm representing the credit card company. I cut his card na like 5months ago, as in literally ginunting ko into half dahil nasa 35k na ang utang without my knowledge. Sabi nya puro annual fees lang un, finances charges and some late charges. For how many years he managed to pay only the minimum amount due until i discovered his debts. Ang alam nya bayad na lahat ng utang nya without interest from the credit card. What will happen next after the demand letter from the law firm? Will they issue a subpoena to my husband? Please help.
ask ko lang po. yung mom ko po kasi may utang na 18k. bale yung 13k po interest lang yung 5k po extra utang nya kaya yung sum 18k. kaso po umalis na yung mom ko pumunta ng qatar.ako po ang naiwan dito 19yrs old at yung dalawa kong lil sis. 17 yung isa yung isa naman 13 palang. then one day nagpakita yung inutangan ng mom ko naniningil, of course wala ako pambayad kaya I told her to contact my mom. I gave her my mom’s no. pero bumalik sya after 2 months papabarangay nya daw ako. I really don’t know what to do. I mean wala kasi dito sa pinas parents ko. what should I do if ever ganun nga agwin nya sakin?. please help
Thank you for sharing. Very informative po ang site and helpful sa studies.
hi,
i have a loan frm a lending compay for my placemet fee…unfortunately i was repatriated from wrk so i came back in the phils.i talked to the lending company about my situation n they give me restructured loan payment.. sometimes due to insufficient income i was not ble to pay my obligtion but i kip on inforing them…then recently i was surprised when they serves a warrant of arrest to 1 of my co borrower…police harrased her n send heto jail..she was ask for a bail….is this with justice? wala po ba kmi karapatan mgreklamo sa lending kung bt nla gnwa to? r they n position na iharas ng ganito ang issan co borrower? pls help po…salamat