Non-paying lender in the Philippines

Question:
I lent money to someone and they have not paid me back for 3 years. How can I file a legal case against them in the Philippines?

Answer:

Identifying the Type of Case

The most common type of case to file in this situation is a "Collection of Sum of Money" case. You could also consider filing a criminal case for estafa or swindling if fraudulent actions were involved, although this would require evidence beyond mere non-payment.

Gathering Evidence

Before filing a case, you should gather all relevant evidence that proves the existence of the loan and the terms agreed upon. This could be a written contract, a promissory note, text messages, emails, or even recorded verbal agreements.

Pre-Litigation Steps

The initial step before going to court usually involves sending a formal demand letter to the debtor. The demand letter outlines the amount owed, the terms of the loan, and gives a specific period (commonly 15 to 30 days) for the debtor to settle the debt. Make sure to send the demand letter through a method that provides proof of receipt, like registered mail.

Filing the Case

If the debtor fails to comply with the demand letter, you can proceed to file a case. To do so:

1. Consult a Lawyer: Given the complexities of the law, consulting a lawyer is often advisable.

2. Jurisdiction: The case should be filed in the appropriate court, usually the Municipal or Metropolitan Trial Court or the Regional Trial Court, depending on the amount involved.

3. Pleadings: Your lawyer will prepare the necessary pleadings, most importantly the "Complaint," which will lay out your claim.

4. Filing Fee: Pay the requisite filing fee, which varies depending on the court and the amount claimed.

5. Summons: Once the case is filed, the court will issue a summons to be served on the debtor, requiring them to file their Answer within a specific period.

Proceeding with the Case

Once the debtor submits their Answer, the court will usually require both parties to attend a preliminary conference to attempt an amicable settlement. If no agreement is reached, the case proceeds to trial, where both parties will present their evidence.

Remedies

If you win the case, the court will issue a decision requiring the debtor to pay the amount owed, possibly along with damages, attorney’s fees, and costs of suit.

Conclusion

Filing a case against a non-paying lender in the Philippines involves multiple steps, from sending a demand letter to going through the court proceedings. To ensure you are adhering to legal protocols and to increase your chance of a favorable outcome, consult a lawyer familiar with debt recovery cases.