When you receive a demand letter from a bank or any financial institution regarding a debt that you are unaware of, it can be an alarming situation. It is crucial to handle the matter carefully and understand your rights as a borrower. Here are the steps you should consider:

1. Verify the Debt

Check Your Records: The first step is to verify if you or any family member has indeed taken out a loan from the bank in question. Look through old documents, loan agreements, and payment receipts.
Request for Validation: You have the right to ask the bank for a detailed account statement and any documentation proving the existence of the debt. This includes the original loan agreement and any records of payments made.

2. Consider the Age of the Debt (Prescription)

Understand Prescription Periods: In the Philippines, debts are subject to a "prescription period," after which the creditor may no longer have the right to legally enforce the debt through the courts. Typically, the prescription period for debts is 10 years, but this can vary depending on the circumstances.
Assess If the Debt is Prescribed: If the debt is from 1992 and there has been no acknowledgment or payment made on the debt, it may be considered prescribed. However, if the creditor has been actively trying to collect the debt within this period, the prescription period could be reset.

3. Responding to the Demand Letter

Write a Formal Reply: It is important to respond to the demand letter, especially if you dispute the debt. A formal letter should be sent to the bank denying the debt if you believe it to be inaccurate or requesting further verification if the debt is unfamiliar.
Do Not Make Payments Immediately: Making a payment, even a small one, may reset the prescription period and acknowledge the debt. This could give the bank the right to pursue legal action within a new prescription period.

4. Seek Legal Advice

Consult a Lawyer: If the demand letter is threatening legal action and you are unsure how to proceed, consult with a lawyer who specializes in debt collection and consumer protection. A lawyer can provide personalized advice based on the specifics of your case.
Legal Defense: If the bank proceeds with a lawsuit, your lawyer can help you prepare a defense, especially if the debt is prescribed or if there is no valid basis for the claim.

5. File a Complaint if Necessary

Report to Regulatory Authorities: If you believe the demand is baseless or the collection practices are abusive, you can file a complaint with the Bangko Sentral ng Pilipinas (BSP) or the Securities and Exchange Commission (SEC), depending on the type of financial institution involved.

6. Stay Calm and Informed

Do Not Panic: Receiving a demand letter can be stressful, but it’s important to stay calm and approach the situation methodically. Gather all the information you can, verify the facts, and take appropriate action.
Know Your Rights: Be aware that as a borrower, you have rights under Philippine law. Financial institutions must follow due process, and any action they take must be within the bounds of the law.

In summary, when confronted with a demand letter for a debt you do not remember owing, take steps to verify the legitimacy of the claim, understand the legal time limits, and seek legal assistance if necessary. Address the situation promptly but cautiously to protect your rights.