03/10/2024
HOW TO COLLECT UTANG IN THE PHILIPPINES
This is not a political post, but rather a practical and useful post.
I did some research about this as I have been trying to collect from different people who keep promising without paying. Haiz.
So, I am posting this guide for everyone.
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STEP 1: GATHER EVIDENCE
Before initiating any formal action, ensure you have sufficient documentation to prove the loan agreement and the amount owed:
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Electronic Communications: Gather screenshots or printouts of your conversations where the loan terms were agreed upon (e.g., Facebook Messenger, WhatsApp, Viber, or email). These serve as electronic evidence of the loan.
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Proof of Fund Transfer: Collect any bank transfer receipts, mobile payment screenshots, or other proof of the loan being disbursed to the borrower.
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Acknowledgment of Debt: If the borrower made any partial payments, gather proof of these transactions as they demonstrate acknowledgment of the debt.
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Messages Acknowledging the Loan: Messages where the borrower acknowledges the loan or promises to repay are strong evidence.
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STEP 2. DETERMINE WHERE YOU AND THE BORROWER LIVE
The process for collecting payment depends on whether you and the borrower live in the same city or municipality or in different locations.
β³οΈ Scenario A: You and the Borrower Live in the Same City or Municipality
If both of you live in the same city or municipality, you must first go through Barangay Conciliation before filing a case in court.
Steps for Same City/Municipality Loans:
π Barangay Conciliation (Katarungang Pambarangay Law):
File a formal complaint at the Barangay Hall where the borrower resides, or where the transaction took place. Barangay Conciliation is required under Presidential Decree No. 1508.
The barangay will summon the borrower for a conciliation meeting, overseen by the Barangay Chairman or the Lupon Tagapamayapa (Barangay Dispute Resolution Council).
You and the borrower will attempt to settle the matter through mediation at the barangay level.
If no agreement is reached, the barangay will issue a Certificate to File Action, which allows you to proceed to court.
π File a Case in Court:
Where to File: After obtaining the Certificate to File Action, file your case in:
βοΈ Small Claims Court for debts below Php1,000,000
βοΈ Metropolitan/Municipal Trial Court (MTC) or Regional Trial Court (RTC) for debts above Php1,000,000
π Do You Need a Lawyer?
Small Claims Court: You do not need a lawyer.
MTC or RTC: A lawyer is optional but advisable for higher-value cases.
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β³οΈ Scenario B: You and the Borrower Live in Different Cities or Municipalities
If you and the borrower live in different cities or municipalities, you can skip Barangay Conciliation and file a case directly in court.
Steps for Different Cities/Municipalities Loans:
π Send a Demand Letter:
Before filing a case, send a formal demand letter to the borrower, detailing the loan amount, terms, and outstanding balance. This letter serves as the final opportunity for the borrower to settle the debt before legal action.
Send the letter via registered mail or courier with proof of delivery, and keep a copy for court evidence.
π File a Case in Court:
If the borrower ignores the demand letter, you can file a case directly in court.
Where to File:
βοΈ Small Claims Court (for claims under Php1,000,000): File the case in the city or municipality where either you or the borrower resides, or where the loan transaction took place.
βοΈ Metropolitan/Municipal Trial Court (MTC) or Regional Trial Court (RTC) (for claims over Php1,000,000): Same rules applyβfile in the location of either party or where the loan transaction occurred.
π Do You Need a Lawyer?
Small Claims Court: You do not need a lawyer.
MTC or RTC: A lawyer is optional but helpful for larger claims.
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STEP 3: PREPARE EVIDENCE TO PRESENT IN COURT
Regardless of where you file the case, you'll need to prepare the following evidence to present in court:
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Electronic Communications (Chats, Messages):
Provide copies of your Facebook Messenger, WhatsApp, Viber, or email conversations where the borrower acknowledges the loan, discusses the terms, and promises repayment.
Proof of Loan Disbursement:
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Bank statements, transfer receipts, or mobile payment confirmations from Gcash or online banking showing that you sent the money to the borrower.
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Proof of Partial Payments:
Any payments made by the borrower, as these indicate acknowledgment of the debt.
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Demand Letter:
Include the demand letter as evidence, along with proof of receipt or delivery.
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STEP 4. FILE THE CASE IN SMALL CLAIMS COURT OR HIGHER COURTS (MTC OR RTC)
β³οΈ Small Claims Court:
Amount Limit: Php1,000,000 or below.
No lawyer required: You represent yourself, and the process is simple and fast.
β³οΈ MTC or RTC:
Amount Limit: Claims above Php1,000,000
Lawyer optional: For larger claims, a lawyer is advisable but not mandatory.
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SUMMARY
β³οΈ If Same City/Municipality:
Step 1: Barangay Conciliation
Step 2: Certificate to File Action
Step 3: File in Court.
β³οΈ If Different Cities/Municipalities:
Step 1: Send Demand Letter
Step 2: File in Court.
Hope this helps!
