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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I have not paid my credit card balance now for 3 months, i have an urgent situation that occcur resulting to not being able to pay my bills? What is the worst scenario if i cant pay it in time or neglect my responcibility?
Hi goodmorning.I have a friend na nang borrow nang money cost 4k pesos and almost 1 year na din sya di nakabayad dahil kapos at ngayong year babayaran nga sana niya muna nang 2k pero di papayag ang nagpapahiram sa kanya sabi pa daw if di sya makabayad nang full payment mag report sya sa pulis at ipapakulong daw niya.Totoo ba talagang makulong dahil lang sa 4k?Please reply.Thanks.
May utang po ako natitira na 10k at wala po ako intention takbuhan. I just need time po at nagkkasabay sabay po bayaran at gastusin. Ang problema po sa pinagkakutangan namin e napaka anghang mag salita at paulit na panunumbat at kahit pinagsisihan mo na pagkakamali nagawa mo e wala pa din tigil at wala kang karapatan mangatwiran pero kainin na lang lahat salita niya at halosmasira na pagkatao ko e wala pa tigil. Anu po ba dapat gawin dito at sobra na po talaga mang humiliate. Wala po ko balak di bayaran .
Hello po magtatanong lang po.. kanina lang po kasi may pumunta diyo sa bahay namin na sheriff daw po ng husgado.. hipag ko nakausap nila at ibinigay lng nila ang # nila para tawagan ko.. my previous loan ako sa dating company ko… ng umalis ako yung lastpay na makukuha ko dapat ay ibinayad ng dating employer ko. Pero may natira pa ring balance dun.. may last payment ako nun last year pa peeo personal ko ng inihubulog sa bank.. at natigil na yun.. may credit card din ako na di ko na rin natuloy bayaran.. pero plan ko pa rin naman sya hulugan kapag nakaluwag luwag na… pero ang concern ko po ay tama po ba yun na puntahan ako sa bahay ng sheriff daw ng husgado.. alam ko naman po na obligasyon ko talagang magbayad..
I have a loan from bpi and due to financial crisi i wasnt able to pay my dues. Now a law office is treathening me that they will file legal actions. What should i do. Im afraid to call their office. What if they ask me for more. Thank you. Hoping for any legal advise
Hello po. May tanong po ako. Nagpadala po ng letter samin ung Philippine Deposit Insurance Corp. kasi nagloan po ata ung tatay ko sa closed na First Country Rural Bank. Second notice and Demand po ung letter pero hindi naman pi namin natanggap ung first letter? Wala din po tatay ko dito para ayusin po to. Ano po ba yung pwedeng mangyati po dito? Thank you po.
Please share your experience. I am in the same situation with my bank.
hello po.ask po sana ako kc may utang po AQ sa isang lending company at nakalapse AQ ng bayad mga 2 months na,ngayun binibigyan nila AQ ng letter stating that qng Hindi q po mabayaran until 5 days e ipafile nila ng legal case sa court of justice . but ang loan q po is magdudue pa on December.. can they really file a case against me po? ..please I will appreciate every reply . it wud mean a lot.. thank you po
Hi po if my utang po sa Avon,pc or tupperware at di po nabayaran pwede po ba akong kasuhan at makulong sa halagang 5k? Salamat po.
At pag hindi dw po aq nkabayad kakasuhan po nila aq.
Hi my husband contracted a personal loan of Php 100000 in february of 2015 from chinatrust bank and issued checks for 36 months amounting to Php 4467/month . Everything went smoothly until he changed his phone number early this year. He didn’t know he had problems with the bank that he issued checks for chinatrust since he changed his number. Thus his remaining 3 checks issued for chinatrust were returned and payment did not push thru. Furthermore, he has left his old house already for 2 years since we transferred to a new house thus he has not been receiving any notice from chinatrust since he issued the post dated checks. Around march 2018 he received an email from a collecting agent of chinatrust that he has to pay Php 13435 for his remaining balance which we obliged to pay and even gave his new cellphone number. Then later in April he was called again by the said agent saying that he has to settle an amount of Php 12000 something to settle his account. My husband already refused to pay such amount since it’s too much for an interest. Can the bank still file a case against my husband?
Please share your experience. I am in the same situation with my China Trus.