Below is an extensive legal article on how to address and resolve a bounced-check case (under Philippine law) that was initiated by a lending company which has since ceased operations. We will cover (1) the legal context of bounced checks in the Philippines, (2) the implications of a defunct lending company on the case, (3) how to move toward a resolution or settlement, and (4) the process of clearing one’s name and record with the National Bureau of Investigation (NBI).

1. Introduction

In the Philippines, the issuance of a bounced check can lead to both criminal and civil liabilities. Criminal liability often arises under Batas Pambansa Blg. 22 (BP 22)—the Bouncing Checks Law—while civil liability can involve the obligation to pay the amount owed plus possible additional fees or damages. When a case is filed in court, this generates a criminal record that appears in one’s NBI clearance if a formal complaint and corresponding information have been filed.

However, complications arise if the lender or private complainant (the entity that filed the case) is no longer operational—often referred to as a “defunct” or dissolved corporation. In many instances, individuals discover open or pending BP 22 cases against them once they request an NBI clearance, possibly long after the lending company has ceased business.

This article will walk you through:

The basics of BP 22
What happens if the complainant lender is defunct
The legal steps to settle or dismiss the case
The process to update and clear one’s NBI record

2. Batas Pambansa Blg. 22 (Bouncing Checks Law) Overview

2.1 Key Elements of BP 22

Under BP 22, it is unlawful to issue a check that is dishonored upon presentment for payment due to insufficient funds or a closed account. The essential elements of a BP 22 violation are:

The making, drawing, and issuance of a check to apply on account or for value;
The knowledge of the drawer that at the time of issue, he or she does not have sufficient funds in the bank to cover the check; and
The dishonor of the check and failure of the drawer to make good the check within five (5) banking days from receipt of notice of dishonor.

2.2 Penalties Under BP 22

Penalties for violating BP 22 typically include:

Imprisonment of up to one (1) year (though in practice, courts often impose fines for first-time offenders or small amounts)
Fine equivalent to double the amount of the check, but not exceeding Php 200,000
Both fine and imprisonment at the court’s discretion

Additionally, a civil liability typically parallels the criminal aspect: the issuer still owes the amount of the bounced check plus possible fees or damages.

3. When the Lending Company (Complainant) Becomes Defunct

3.1 Legal Standing of the Defunct Company

If the lending company that filed the complaint has already closed, merged, or been dissolved:

Pending Civil Cases: Normally, any civil claims might be pursued by the company’s legal successor (if it merged with another company) or by a liquidation team or receiver if the company went bankrupt.
Pending Criminal Cases: For criminal cases, the State (through the Office of the Prosecutor) effectively prosecutes the offense in the name of the People of the Philippines. Even if the original complainant can no longer be contacted, the criminal case can, in principle, still proceed if the prosecution has enough evidence and chooses to continue.

3.2 Impact on the Bounced Check Case

Criminal Aspect: The government is the real party in interest in criminal cases. A private complainant’s absence may weaken the prosecution’s evidence, but does not automatically dismiss the case. Prosecutors still need the original check(s), documentation, and testimony.
Civil Aspect: If the lending company is truly defunct and has no legal successor, pursuing civil liability may be impossible unless there is a designated receiver or an assignee of its assets and liabilities. In some cases, the dissolution might lead to an abandoned civil claim.

4. Steps to Resolve the Bounced Check Case

To remove the negative record from your NBI clearance, you must achieve a legal resolution in the criminal case. The following steps may help:

4.1 Verify the Case Status at the Court

Obtain the Case Details: Visit the Office of the Clerk of Court in the court where the case was filed (often the Municipal Trial Court or Metropolitan Trial Court). Request the docket number and case status.
Review Court Documents: Request certified true copies of relevant court orders or the information/complaint to identify the allegations, the amount involved, and the current status (active, archived, dismissed, or with a warrant).

4.2 Check for Outstanding Warrant of Arrest

If the case is still active and you have not appeared in court, a warrant of arrest may have been issued. You can:

Post Bail: To avoid arrest and protect your rights, you may need to post bail. Bail ensures your appearance in court while the case is ongoing.
Engage a Lawyer: Secure legal counsel to handle the case and any pending motions. An attorney can file appropriate pleadings (e.g., a motion to lift warrant, if any).

4.3 Explore Settlement or Compromise (If Possible)

Identify the Proper Representative: If the company is truly defunct, find out if there is a liquidation officer, an assignee, or any remaining officer empowered to settle outstanding claims.
Negotiate for an Amicable Settlement: If a representative still exists, offering to settle the principal amount plus possible penalties or fees can lead to an affidavit of desistance or settlement agreement. The private complainant’s withdrawal of interest can encourage the prosecutor to move for dismissal or allow for a compromise.
Payment and Formal Documentation: Ensure all settlement terms are in writing, signed by parties with a corresponding affidavit of desistance or release from the lender’s representative.

4.4 Motion to Dismiss or Withdraw the Case

Filing of Motion to Dismiss: If the private complainant (or its authorized successor) files an affidavit of desistance and the case is purely private in nature (though it is still a criminal complaint, the court’s approval is needed), the prosecution may file a motion to dismiss.
Court Approval: Ultimately, a judge decides whether to grant the motion. Once granted, the case will be formally dismissed.

4.5 Seek Judicial Declaration of Dismissal if Complainant is Absent

If the lender has no successor or is unwilling/unable to pursue the case:

Request for Case Archival or Dismissal: If the prosecution cannot proceed due to lack of evidence (e.g., missing original check, no testifying witness), your lawyer can request the court to dismiss the case for failure to prosecute.
Court Hearing: The court will schedule a hearing to determine whether the Prosecution can carry on. If evidence is insufficient or the complaining witness fails to appear repeatedly, the court may order dismissal for failure to prosecute.

5. Clearing the NBI Record

5.1 Understanding How NBI Records Work

NBI Clearance: An NBI clearance captures any criminal case or complaint filed before a court where the individual is charged or indicted. Even if there is no final conviction, an open/pending case can still appear as a “hit.”
Updating the Record: Once you have a court order dismissing the case or a Certificate of Finality (when no appeal is taken within the reglementary period), you can request the NBI to update your record.

5.2 Steps to Update Your NBI Record

Obtain Certified True Copies of Dismissal
Secure certified true copies of the Order of Dismissal and Certificate of Finality (if required) from the court.
Submit Documents to NBI
Go to the NBI office that handles records (or the main office in Manila) and present the certified true copies. They may require you to fill out forms or make a formal request.
Request Clearance Record Update
Ask the NBI to remove or amend your record based on the dismissal.
Obtain a New NBI Clearance
After the update is processed, apply for a new NBI clearance. If everything is in order, the new clearance should no longer carry the bounced check case record.

5.3 Rectifying Errors or Inaccurate Records

If, despite a dismissal, the NBI record is still flagged, you or your lawyer may file a formal Letter of Request for correction with supporting documents (the dismissal order, certificate of finality, etc.). It is crucial to check from time to time until the NBI database reflects the updated status.

6. Additional Considerations

6.1 Prescription Period of BP 22 Cases

Generally, the offense under BP 22 prescribes in four (4) years from the date of commission (issuance of the bouncing check). However, if the case is already filed in court within that period, the running of the prescription is tolled (i.e., stopped). Merely waiting out the prescription period may not be a valid strategy if there’s already an active case.

6.2 Importance of Legal Assistance

While some individuals attempt to handle the case on their own, consulting an attorney—especially one experienced in BP 22 cases—is advisable. Legal counsel can streamline negotiations, file the proper pleadings or motions, and guide you through complexities if the lending company is defunct.

6.3 Court Fees and Other Costs

Depending on the nature of the case and your chosen strategies (e.g., motions, bail bonds, possible settlement amounts, etc.), you may incur certain fees. Ensure you keep receipts and official documentation of payments to avoid disputes later.

6.4 Potential Civil Suit

Even if the criminal aspect is settled or dismissed, an unpaid obligation might give rise to a separate civil suit—though in the case of a defunct lending company without a successor, this risk is minimized unless its creditors or assignees step forward.

7. Conclusion

Resolving a bounced check case filed by a now-defunct lending company in the Philippines requires a clear understanding of both the criminal and civil dimensions under BP 22. While the dissolution of the original lender can complicate matters, it can also work in the accused’s favor if the prosecution lacks the evidence or the complainant no longer wishes—or is unable—to pursue the matter.

Key Takeaways:

Verify the Case Status: Start by determining the case docket number, current status, and whether a warrant of arrest exists.
Settle or Dismiss: Look for ways to settle if there is a valid successor or representative. Otherwise, move for dismissal if the prosecution lacks evidence.
Obtain a Court Order of Dismissal: Only a formal order from the court (plus a certificate of finality) can fully clear your name.
Update Your NBI Record: Present the certified true copies of the dismissal to the NBI for record clearing.
Legal Counsel: Consult a lawyer to ensure all steps are valid and properly executed.

By diligently following court procedures and providing the NBI with the necessary documentation, one can successfully clear any negative entries resulting from a bounced check complaint—even if the original lender no longer operates.