Dear Attorney,
I am currently facing a serious financial challenge that has made it difficult for me to repay a debt I owe to a lending app. I have always been a good payer, but since May, I have been unable to make payments due to my mother's medical expenses. My mother suffered from heart failure, which required hospitalization, an angiogram, and several laboratory tests. The cost of her treatment has consumed a significant portion of our income, leaving us struggling to meet other financial obligations, including this debt.
The lender has been contacting me, insisting on immediate payment, despite my efforts to negotiate a more manageable payment plan. They have now begun to send emails threatening legal action. I am extremely stressed and unsure of what steps I should take. Could you please advise me on the best course of action in this situation?
Sincerely,
A Financially Stressed Debtor
Insights
In situations like yours, where a debtor is unable to meet repayment obligations due to unforeseen and significant financial burdens, it is important to approach the situation with a clear understanding of your rights and options.
Communication with the Lender: Continue communicating with the lender. Ignoring their calls or emails may lead to more aggressive collection efforts, including legal action. When you do communicate, reiterate your willingness to pay, explain your current financial situation, and propose a feasible payment plan. Lenders are sometimes willing to negotiate terms when they see that you are cooperative.
Documentation: Gather all documentation related to your mother’s medical condition and expenses. This information can be crucial if the matter escalates to legal proceedings, as it will help demonstrate your financial difficulties were due to legitimate and unavoidable reasons.
Debt Repayment Plan: Consider offering a smaller, more manageable amount as a sign of good faith while negotiating for a longer payment period. This can help in showing the lender that you are committed to repaying the debt despite your current challenges.
Legal Action: If the lender does initiate legal action, it is important to know that you have options. In the Philippines, cases involving small claims are handled in a simplified and expedited manner. While this might be intimidating, the law also provides protections for debtors, particularly when they are acting in good faith. Courts often take into consideration the debtor’s financial situation when deciding on the case.
Seek Legal Assistance: If you believe that the lender is being unreasonable or if legal action is initiated, it may be wise to consult with a lawyer. A lawyer can help you understand your rights and guide you through the legal process, ensuring that you are not taken advantage of by the lender.
Consider Debt Relief Options: In some cases, debt restructuring or relief programs may be available, depending on the type of loan and lender. Exploring these options with the help of a financial advisor or legal professional could provide a long-term solution to your financial difficulties.
Overall, the key is to remain proactive and communicative while seeking legal guidance if the situation escalates. Your health and well-being are important, so managing stress and seeking support where necessary is also essential during this difficult time.