What can you do if someone refuses to pay a debt despite having a written agreement?

In the Philippines, a debt obligation, especially one evidenced by a written agreement, is enforceable by law. The written contract serves as evidence of the debt and the debtor's commitment to repay it. When a debtor refuses to honor their obligation, the creditor has several legal options to seek repayment.

Demand Letter: The first step is to send a formal demand letter to the debtor. This letter should outline the debt's details, the amount owed, the due date, and a demand for payment within a specified period. A demand letter often serves as a precursor to legal action, demonstrating the creditor's intent to pursue the matter seriously.
Filing a Case in Court: If the debtor still refuses to pay despite the demand letter, the creditor may file a civil case for collection of sum of money. The proper venue for filing the case will depend on the amount involved. The case should be supported by the written agreement and any other evidence that proves the debt's existence and the debtor's failure to pay.
Execution of Judgment: If the court rules in favor of the creditor, a judgment will be issued ordering the debtor to pay the amount owed. If the debtor still refuses to comply, the creditor may request the issuance of a writ of execution, allowing the sheriff to seize and sell the debtor's properties to satisfy the debt.
Garnishment of Wages or Bank Accounts: In some cases, the court may also allow garnishment, where the debtor's wages or bank accounts are seized to satisfy the debt. The creditor must apply for a writ of garnishment, and once granted, the debtor's employer or bank will be ordered to withhold a portion of the debtor's income or funds and remit them to the creditor.
Insolvency Proceedings: If the debtor genuinely cannot pay the debt due to insolvency, the creditor may initiate insolvency proceedings. This legal process involves liquidating the debtor's assets to pay off the debt. However, insolvency is a more complex and often less favorable option, as it usually means the debtor has no sufficient assets to cover the debt fully.
Negotiation and Settlement: Before and even during legal proceedings, the parties may still negotiate and reach an amicable settlement. This approach can save time, legal costs, and the strain of prolonged litigation. The settlement terms should be documented in writing and signed by both parties.

Creditors should always consult with a lawyer to assess the best course of action based on the specific circumstances of their case. While legal remedies are available, pursuing them requires careful consideration of the costs, time, and potential outcomes.