Dear Attorney,

I am writing to seek your legal advice regarding a situation I am currently facing with the solicitor of my creditor. This solicitor has been pressuring me to settle my debt by showing me a summons with her client and inviting me to attend a meeting with our Barangay Captain. She claimed this was not a threat, but if I did not agree to her terms, I would be the next to be summoned. She also threatened to involve my spouse, who is not a party to the loan, if I refuse to sign an agreement with a 5% monthly interest rate.

I have been paying for almost three years, and I was informed that all my payments have gone toward interest only. When I requested a copy of my loan contract and receipts for my payments, she refused to provide them. I believe this solicitor's actions may be illegal, and I am considering legal action for harassment. What should I do?

Insights

In the context of Philippine law, the actions of the solicitor, as described, may indeed constitute harassment and other violations of your rights as a debtor. Under the Fair Debt Collection Practices Act (FDCPA) and relevant provisions in the Revised Penal Code of the Philippines, certain conduct by debt collectors is strictly prohibited. This includes the use of threats, intimidation, or any form of harassment to pressure a debtor into making payments or signing agreements.

Firstly, the solicitor's threats to summon you before the Barangay Captain and to involve your spouse, who is not a party to the loan, could be considered as undue harassment. It is important to note that debt collectors are allowed to contact debtors to request payment, but they must do so in a manner that does not violate the debtor's rights or cause unnecessary stress or fear. The act of showing a summons with an intent to pressure you could be interpreted as an attempt to intimidate you, which is not allowed.

Secondly, the refusal to provide you with a copy of your loan contract and receipts for payments made is highly concerning. Under Philippine law, creditors are required to furnish debtors with clear and accurate records of their obligations and payments. Without this documentation, it is difficult for you to verify the legitimacy of the debt and the interest charges being imposed.

Regarding the interest rate of 5% per month, this is equivalent to 60% per annum, which exceeds the legal interest rate limits in the Philippines, potentially making it an usurious rate. The Usury Law caps the interest rate for loans at a much lower figure, and any agreement with an excessive interest rate may be considered null and void.

Given these circumstances, you have several options:

File a Complaint for Harassment: You may file a complaint against the solicitor with the local Barangay or even with the Office of the Ombudsman if there is a clear abuse of authority. This could lead to mediation or a more formal investigation.
Request for Documentation: You should formally request, in writing, a copy of your loan agreement and all receipts for payments made. If the solicitor or creditor continues to refuse, you may report this to the appropriate regulatory bodies such as the Bangko Sentral ng Pilipinas (BSP) or the Securities and Exchange Commission (SEC), depending on the nature of the creditor.
Consult a Lawyer: Given the complexity of your situation and the potential for significant legal violations, it would be wise to consult directly with a lawyer who specializes in debt collection practices. They can provide specific advice tailored to your case and assist in pursuing legal action if necessary.
Consider Filing a Civil Case: If the harassment continues or if you believe that the solicitor’s actions have caused you significant distress or financial loss, you may consider filing a civil case for damages.

It is important to act swiftly to protect your rights and ensure that you are not subjected to further unlawful practices by the solicitor.