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COLLECTING A DEBT WITHOUT GETTING A LAWYER

Have you ever lent a measly amount of money to a friend, colleague, businessman or even just to
anyone who is in dire need for daily sustenance? However, by the time you attempted to collect the
money lent, you experienced difficulties for its repayment?

Afterwards, you realized that collecting the money lent got even more difficult as it went because
getting a collection lawyer is pricier than the amount to be collected from the borrower. So, you then
feel hopeless and even consider taking the law into your own hands, assuming you will be lucky not to
go behind bars because of your unwanted demands.

Knowing what to do will not put you in a bothersome position. More so, if you know the fundamental
legal remedies available in this kind of situation. Consider yourself fortunate for having browsed this
section. If you are one of those luckless, ignored and unappreciated lenders, this writer will lead you to
the right direction.

 THE MOST EFFICIENT AND INEXPENSIVE WAY OF COLLECTING A DEBT.

In the Philippines, undertaking a lending business, either those which are regulated ones like in “Micro-
finance” or unregulated ones like those undertaken by loan sharks, is, most of the time, taxing to
embark. This matter is brought by the fact that, when the loan turns sour, collection efforts will then be
exerted for considerable hours.

Nevertheless, lenders belonging to either class should no longer be stressed in this kind of distress as
our rules of procedure provide for a simple, speedy and inexpensive means for redress.

I. SMALL CLAIMS CASE.

The Supreme Court of the Philippines developed a rule of procedure for collecting a debt without
getting a lawyer. However, the amount to be claimed by the lender should not exceed a certain
threshold as the high court ordered.

This rule of procedure is covered under A.M. No. 08-8-7-SC, otherwise known as “The Rules of Procedure
for Small Claims Cases”. The highlight of this simplified Procedure for Small Claims Case is the use of
accomplished forms, the conduct of dispute settlement in the courts and the “one-hearing” rule.

II. SCOPE

The rule provides that the Small Claims Case may be filed before the First Level Courts such as the
Metropolitan or Municipal Trial Court.

Apart from collecting a measly amount of money lent, Small Claims Case also covers collection of money
arising from rents, mortgages, sale and services where the value of the claim does not exceed
PHP300,000.00, exclusive of cost and interest.

Separate claims may be joined into one case, provided that the total amount claimed, exclusive of cost
and interest does not exceed the required threshold earlier relayed.
III. FILING

A Small Claims Case is, generally, initiated by filing with the Metropolitan or Municipal Trial Court where
either party to the contract are situated copies of accomplished forms, contract or document evidencing
the claim, affidavit of the witnesses and other pertinent documents.

IV. FEES

While a claimant need not worry to pay for Lawyer’s Professional Fee, docket and legal fees are, most of
the time, required at the very least.

Furthermore, an additional charge will apply when in a calendar year, a person files several claims for
more than five times.

V. APPEARANCE

Personal appearance of the parties is required under the rule, except for compelling reasons that an
individual-party needs to send a representative. While this may be allowed, a representative must be
related to or next-of-kin of the individual-party and must not be a lawyer. The prohibition admits an
exception, and this is when the plaintiff or the defendant is an attorney by profession.

This reason is brought by the experience that lawyers, sometimes, delay court proceedings, if not, are
stumbling blocks to a possible settlement. They tend to be more legalistic and particular about the
observance of the technical niceties, opposite to the objectives of this rule which is the protection and
advancement of the constitutional right of persons to a speedy disposition of their cases or action.

VI. ANSWER AND NOTICE OF HEARING

If the Court finds the accomplished forms, along with the attached documents sufficient in form and
substance, the Court will direct the defendant to submit a verified response. Afterwards, the Court will
notify the parties of the scheduled hearing, set within thirty (30) days from the filing of the Statement of
Claim, with a warning that unjustified postponements and motions for the dismissal of the case are not
allowed in every stage.

VII. DISPUTE SETTLEMENT

During the hearing, factual and legal issues are not yet directly considered, instead the judge shall first
exert efforts to bring the parties into an amicable settlement.

VIII. “ONE HEARING” RULE

If attempts to bring the parties into settlement fails, the hearing shall immediately proceed in an
informal and expeditious manner and be terminated within the same day.

DECISION

Within twenty-four hours (24) from the termination of the hearing, the Court shall issue the decision
relative to the proceeding.

 LENDER; TO MAKE “DUE DILIGENCE”


Having known the fundamental rule, will make you at ease knowing the fact that you now have a
collection tool. At this time, you will no longer have any apprehension if you are one of those go-to
person where anyone can get a loan. Nevertheless, despite the advent of this simplified and expensive
procedure, due diligence must still be exerted by every lender. Probing your borrowers’ capacity to pay
will not in any way put you in dismay.

 BORROWER; TO MEET THE END OF HIS COMMITMENT

Borrowing money is not bad in itself, just make sure to meet the end of your commitment. Doing this
will spare you from the burden of paying accumulating interest and unwanted penalties, leading to
freedom from the enslavement of debt and liquidity of assets.

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