May Nakukulong ba sa Utang? Charges and Constitutional Limitations of Not Paying Debts

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A known meme circulates Social media platforms then when a person asks what seems to be a Science trivia question, “What comes after Mars.” is answered jokingly with “… Pautang”. 

It is a common practice here in the Philippines where we resort in asking financial help from our relatives and friends to help us reorganize or recalibrate our finances, or when we ought to buy an appliance or device that we cannot fully pay immediately after purchase.

We also commit debt when even in difficult monetary condition we still want to celebrate birthdays, weddings, or Fiesta or as the folks say, “Para may pang-handa”.

In numerous times, debt is a result of our material obsession, community pressure and disorganized and negative behavior over budgeting our bills and expenses making us fell in the depths of the credit loop, or the debt quicksand.

Yet, there is nothing wrong in asking a little help, it is inevitable – it is true that we oftentimes can hit the bulky road of pagkasimot however as time goes by, undesirable conceptions towards the act emerges.

This damaging notion are deeply engrained to people who did not stood up with their credit responsibilities, ran away from their collectors, behave aggressively and violently towards their collectors, or even had committed fraudulent acts that resulted in overwhelming societal chaos, thus making debt an issue of trust, responsibility, accountability and of the LAW.

So, will there be consequences for those actions? Can you be incarcerated because? How can creditors ensure safety, business stability and justice?  Let us delve into and clear those confusions about lawful charges and constitutional limitation of debt associated acts and ways on how we can restructure your financial mindset and behavior. 

The 1987 Philippine Constitution Article 3 or the Bill of Rights, Section 20 states: “No person shall be imprisoned for debt or non-payment of poll tax.” The provision evidently answered the question of imprisonment for non-payers of debt; However, this is not the yellow brick road, or a bullet dodged. There are still underlying circumstances, graced by the law that can make you answer for your unpaid dues. 

Even with the provisions of Article 3 Section 20, your creditors can still drag you to court by applying for complaint and petition of claim, if the debt is not more than Php. 300,000.00 the creditor can summon the debtor for a Civil Case under Supreme Court’s Administrative Matter No. 08-8-7 otherwise known as “Rule of Procedure for Small Claims Case”.

The amendment was established to ease collection burden from non-payers of debt whether overdue rental fees, service fees, contract-bound situations, or from those who truly intends to pay but failed to do so because of blown up interests and penalties or a financial set-back that has occurred.

Aside from that, it is also established to avoid harassment and offensive acts towards the debtor. The court will summon both parties for a hearing and after not more than a month the court shall release a decision of individual debtor insolvency, reconstruction of the payment methods, new due dates, or collection of any properties of the debtor that will suffice as payment for the outstanding financial responsibilities. 

Furthermore, Filipinos are also fond of collecting Credit cards from various banks with a terrible mindset that obtaining one means a Holiday bonus; kaskas dito, kaskas doon – unknowingly when the fees become overwhelming and one cannot or do not have the resources to pay, a burgeoning, headache giving and anxiety causing problem comes in. 

The same provisions explained previously are applied with your problematic Credit card loans. However, if you plan to commit fraudulent acts to escape the unending demand letters sent to you by your banks that is when a criminal case may be filed. Republic Act No. 8484 or the “The Access Devices Regulation Act of 1998” states that, any person who obtains money or anything valuable, an outstanding balance of  
Php. 10, 000.00, overdue for 90 days and above and with a sole intent of fraud and fleeing (paglipat ng bahay nang walang pasabi) one can be charged of a criminal case and be imprisoned for not less than 6 years and a collection of the debtor’s property, whichever shall suffice. And aside from fines and imprisonment for any of these acts, or even if you successfully plead your insolvency, your financial reputation is massively tainted across all borders of the island. You will be blacklisted in any banks, credit corporations and capital and investment companies in the entire Philippines.

Another fraudulent act that an unaware, courageous individual might commit to fool their debt collectors is issuing a bank check to pose as a payment for the outstanding financial obligations yet eventually the check will be tagged as invaluable for the person’s account balance is insufficient for the check thus, the bank has to reject it or “bounce it back”, hence the name Bouncing check. This kind of dishonest and illegal act can be penalized under Batas Pambansa Blg. 22 (B.P. 22) or the “Anti- Bouncing Check Law”. B.P. 22 penalty can be 30 day to a year imprisonment or a fine of Php. 200,000.00 or not more the amount of the bounced check, doubled or both fine and imprisonment depending on the decision of the court. Additionally, the act of deceit performed through bouncing checks is liable as Financial crime under Article 315 or Estafa/Swindling of the Revised Penal Code of the Philippines. The prosecuted can be charged with a two-month or 8-year imprisonment depending on the degree of fraud. Other Estafa cases includes forgery on legal documents such as contracts, letters, and certifications, acquiring money or valuable materials through identity theft whether physical or through digital means (see Cybercrime Acts), misappropriation or unauthorized used of somebody else’s finances for personal gains and purpose, and tax evasion. 

Asking for financial assistance sometimes is needed to get back up from our sudden financial setbacks, yet alongside grants of debt are accountability, honesty, discipline, and dignity towards your debts. Having debts per se does not make you less of a person and does not make you a criminal; the basic law of the land had obviously and perfectly established that, but your duplicitous actions towards your unpaid dues that will eventually result to further damages and inconvenience can say a lot about your behavior, misguided mindset, and uncultured acts as a debtor. Help yourself by allocating your budget properly, disciplining your purchase attitude, saving for emergencies, and investing for future gains. If loaning is really needed, then Pay your debts – para ika’y makaulit.

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