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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Hi, my mother is a teacher and have a salary loan, but her early retirement has been approved and the bank is unable to collect debts. At the moment, the loan accumulated and is demanding payment. What might be the bank’s action, do they still have the right to collect? But they cannot provide detailed computation of the loan, are we obliged to pay even though they cant provide computation of the loan?
Hello!
I’m working in a hospital. If the patient is abscond, what are the possible hospital legal actions should do for that patient to pay his hospital bill?
The barangay won’t cooperate to summon the patient or responsible of the account.
Thank you po.
Good day po. Two years ago ng lumubog kmi sa utang dahil sa patong patong na interes sa 5-6. To the extent n di na kmi makabayad. Then forcefully, kinuha ng nag papa 5-6 ung sasakyan nming owner bilang kabayaran daw. And then kinuwenta nila at di pa daw sapat unti unti nagbayad kmi nung natitira. But because alam nmin na halos interes nlng ung binabaydan nmin sa knila nag li lo na kmi nang pagbabayad. And until ngaun, sinisingil pa din nila kmi dun sa 39k na balanse daw nmin. Nakikipag matigasan kmi kc sobrang sobra naman na ang moral damages na nadulot nila sa amin. Ngaun n kahit medyo kaya na nmin magbayad dahil may maganda na kong trabaho e sumasagi sa isip ko na wag nlng dahil besides sa madami ndin kmi naubos na pera kababayad sa knila e kung ano ano pang banta ang naririnig namin sa kanila. Ano po maaadvice ninyo sa akin about po dito.
Sir
Can you give me an advice what im gonna do. I have an unpaid credit card an the collection agency the called me that they will go to my house tomorrow to sheriff my house coz the have already a warrant to sheriff my house but If I pay today a 20k today they will stop the sheriff. It is true i haven’t received any subpoena or letter for the hearing.
Please help me what to do.
Hello,
Would like to ask law with non-payment of loans that used checks. It is a salary loan with a bank and the bank issues you a check which you need to fund as payment for the loan amortization. Is this case in scope of BP22?
Thanks in advance for the help.
Please share your experience. I am in the same situation with my China Trus.
My former employer from singapore loaned me $4k,we agreed to deduct from my salary. But his sister framed and accused me of stealing and got me into jail. I came home to philippines and still he demands me to pay the loan. He hired a collector here in philippines. I have no sources to pay the loan. What will i do? I am a single mom too.
Hi
I just wanna seek a help. I worked before in a motorcycle company. During that time, nagkaroon po ako ng loan sa isang lending company sa halagang 20,000 para magamit sa additional budget ng activities. Kaya lng po ang nangyari ako lang po ang pinapirma na inasahan ko na mareimburse. Sa kasalukuyan po nagresigned na po ako 4 years na po. Pero sa kasalukuyan ako po ang sinisingil nila. Maari nyu po ako tulungan sa problema ko.
salamat po
Hi
I just wanna seek a help. I worked before in a motorcycle company. During that time, nagkaroon po ako ng loan sa isang lending company sa halagang 20,000 para magamit sa additional budget ng activities. Kaya lng po ang nangyari ako lang po ang pinapirma na inasahan ko na mareimburse. Sa kasalukuyan po nagresigned na po ako 4 years na po. Pero sa kasalukuyan ako po ang sinisingil nila. Maari nyu po ako tulungan sa problema ko.
salamat po
hi, i have been working in another country po for 2 years now and before I left Philippines, I have unpaid credit cards debts po now, Im going back to Philippines for vacation, takot po ako baka di ako makabalik s country kasi baka i block po ako ng immigration, wala naman po akong binigay n checks or anything. Ask ko lang po if magkakaproblema po ba ako nyan s immigration by the time babalik na po ako abroad from vacation?
hI! My wife and a certain couple both government employee agreed to be a business partner . lending money to interested persons with 5% interest ..my wife got the money from the couple and lend it to interested persons with 6% interest. For the first year of the said business was ok ,but comes a time that the debtor failed to pay and some others moved somewhere without leaving their whereabouts ..for this reason the couple went to our house with a written contract that our small house and lot serve as a collateral including improvements etc. we affixed our signature because the couple gave us assurance that they are not interested of the property . We were force to shoulder the payment for the fear that our small property will be sequestered and the couple started harassing my family when sometimes we cannot give some payments due to incapacity. We already have returned the principal to the couple by installment , and even more than the principal; amount ..but until now they still keep on demanding us payments maybe a compounded interest …are we obliged to pay more ? do they have the right to sequester the property? thank you for the reply God Bless.