No One can be Imprisoned for Non-Payment of Debt

Perhaps you’ve heard someone making threats to file criminal cases against debtors who fail to pay. Yet you’ve heard the statement that no one can be imprisoned simply because of a debt. This is a basic principle and we thought we already have a discussion on this topic. We indeed have such discussion but we forgot to post it here. So here goes.

The prohibition against imprisonment for a debt is a basic right enshrined in no less than the Constitution (Article III):

No person shall be imprisoned for debt or non-payment of a poll tax.

The rationale for this prohibition is explained in the case of Lozano vs. Martinez, thus:

. . . Viewed in its historical context, the constitutional prohibition against imprisonment for debt is a safeguard that evolved gradually during the early part of the nineteenth century in the various states of the American Union as a result of the people’s revulsion at the cruel and inhumane practice, sanctioned by common law, which permitted creditors to cause the incarceration of debtors who could not pay their debts. At common law, money judgments arising from actions for the recovery of a debt or for damages from breach of a contract could be enforced against the person or body of the debtor by writ of capias ad satisfaciendum. By means of this writ, a debtor could be seized and imprisoned at the instance of the creditor until he makes the satisfaction awarded. As a consequence of the popular ground swell against such a barbarous practice, provisions forbidding imprisonment for debt came to be generally enshrined in the constitutions of various states of the Union.

This humanitarian provision was transported to our shores by the Americans at the turn of the century and embodied in our organic laws. Later, our fundamental law outlawed not only imprisonment for debt, but also the infamous practice, native to our shore, of throwing people in jail for non-payment of the cedula or poll tax.

In other words, no one could be compelled to pay a debt under pain of criminal sanctions (estafa is a different matter). No one could also substitute the payment of debt through imprisonment or other criminal penalties (subsidiary imprisonment is also another matter).

Let’s examine some laws that were questioned, albeit unsuccessfully, on the ground that these laws violate the constitutional prohibition against non-imprisonment for debt.

Bouncing checks. Certain laws, including Bouncing Checks Law (BP 22),  have been questioned as a violation of this right. However, it’s not the non-payment of an obligation which this law punishes. The law isn’t designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them in circulation. Checks have become widely accepted as a medium of payment in trade and commerce, and if the confidence in checks is shaken,  the usefulness of checks as currency substitutes would be greatly diminished. When the question was resolved in 1986, it had been reported that the approximate value of bouncing checks per day was close to 200 Million Pesos, thereafter averaging between P50 to P80 Million a day. (Lozano vs. Martinez)

Trust receipts. The same argument was raised against the Trust Receipts Law (PD 115), which is a declaration by the legislative authority that, as a matter of public policy, the failure of a person to turn over the proceeds of the sale of goods covered by a trust receipt or to return said goods if not sold is a public nuisance to be abated by the imposition of penal sanctions. It punishes the dishonesty and abuse of confidence in the handling of money or goods to the prejudice of another. The law does not seek to enforce payment of a loan. (Tiomico vs. CA)

Credit cards. Under the Access Devices Regulation Act of 1998 (RA. 8484), anyone who obtains “money or anything of value through the use of an access device, with intent to defraud or with intent to gain and fleeing thereafter” is criminally liable, punishable with a fine and imprisonment. That law also provides that a cardholder who abandons or surreptitiously leaves the place of employment, business or residence stated in his application or credit card, without informing the credit card company of the place where he could actually be found, if at the time of such abandonment or surreptitious leaving, the outstanding and unpaid balance is past due for at least 90 days and is more than P10,000.00, shall be prima facie presumed to have used his credit card with intent to defraud.” We are still waiting for the test case on this.

39 Responses to “No One can be Imprisoned for Non-Payment of Debt”


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  1. 15 mariasharapova844 Aug 6th, 2010 at 10:44 am

    I am a single proprietor and I have a bookkeeper.Thank you so much.

    Credit Card Debt

  2. 14 mishy_sd Jul 1st, 2010 at 1:39 pm

    hello there,

    i just wanted to know the best and legal way for me to get the money that was borrowed to me by an OFW who is based in S. Korea. I have been promised countless times and even sent me a copy of her drivers license, alien reg card and a promise to pay letter but with no good results.

    I know that no one gets imprisoned because of debt, but would it be possible to have that person deported from S. Korea for non-payment of debt?

    (The money borrowed amounted to P250k that’s why it concerns me a lot)

    Your response will truly help.

    Mishy

  3. 13 csinternational Jun 23rd, 2010 at 7:22 am

    Hello,

    I am a single proprietor and I have a bookkeeper. However, the bookkeeper did not pay all my contributions for specific months so I paid all the discrepancies during the business permit renewal. Can I sue my bookkeeper for anything? The discrepancy is around more or less 30thousand pesos. I would highly appreciate your reply.
    Thank you so much.

  4. 12 rianna04 Jun 21st, 2010 at 8:23 am

    Hi,

    I owe a certain bank payment for a salary loan. I understand what the blog said about not being imprisoned but what about taking of properties? I saw from the link that you quoted the bill of rights to support this. However, the latter mentions, “… no one can be deprived of life, liberty, property without due process..” or something like that.

    Question is, can they really take properties even if they are willing to go through all the legal proceedings? What can we do, too, as consumers who have somehow taken steps to pay but just cant pay the full amount due to sudden changes in circumstances that affected our capability to pay?

  5. 11 bull Jun 16th, 2010 at 2:43 pm

    Gusto ko lang po magtanong kung tama ba yung ginagawa ng isang collection agency. Pang huling bayad ko na lang sa credit card dapat nung March 2010 kaya lang di kami naka pagbayad sa dahilan na di pa ako naka pagtrabaho muli mula nun na retrench mula 2009, pero kahit paano nakaka bayad naman kahit nahuhuli sa petsa. Nitong marso hanggang hunyo medyo nahirapan lang talaga, pero naka bayad kami ng limang libo sa kanila at natira yun mahigit isang libo na interest daw yun sa limang libo.

    Ngayon sinabi na namin na magbabayad kami bago matapos itong buwan ng hunyo, pero napakasama ng mga salita na binitawan samin ng collection agency sa telepono, keso sasampahan daw kami ng kaso na breach of contract; ipapapublish daw nila ang pangalan namin at marami pang ma-aanghang salita. Alam namin na nahuli itong pang huling at final na bayad pero sa ulit, nakapagbayad din ng mahigit sa kalahati na hinihingi nila. Tama ba itong ginagawa ng collection agency at kung hindi, saan kami puede dumog para makapag-reklamo.

    Maraming salamat po.

  6. 10 inpain Jun 13th, 2010 at 6:55 pm

    Please give us advice since there are thousands of OFWs from UAE having the same problem and being threatened and harrased by these collecting agencies. We know we have obligation but we dont have a choice since we lost our jobs and now it we have only budget for our families and other basic needs. please help us

  7. 9 inpain Jun 13th, 2010 at 6:52 pm

    Hi Sir,

    I am an ofw in uae and since i lost my job i left the country at umuwi dito sa pinas kasi makukulong ka sa uae if 2 monthly di ka nakapay ng due mo. my question is makakasuhan o makukulong po ba ako dito sa pinas since yung debt ko nasa uae? all applications for credit cards and loans doon ay pinapaissue kami ng check, makukulong po ba ako nila d2?please i need your advice.
    thanks!

  8. 8 arion778 Jun 10th, 2010 at 11:43 am

    Good day!

    i just want to know what would be the sanction of breaching of contract of lessor vs. lesse?

    a lesse has almost php75,000 of debt to lessor and they transfer to another house without noticing the lessor..

    Thanks!..

  9. 7 cervaborn May 30th, 2010 at 11:16 am

    Can a person be imprisoned for school debt?

  10. 6 HowardChan May 29th, 2010 at 4:45 pm

    Right. I guess that constitutional provision is one of the most misunderstood provision. But on the other hand, The loan business industry in the country is a loose one. So in reality, a lot of people do not go to court to settle their debt. Most loans are incurred via the “5-6″ system anyway.

    For more discussion on Philippine Jurisprudence, feel free to visit
    http://howardscasedigests.webs.com/

  11. 5 jc32569 May 12th, 2010 at 1:33 pm

    Is their a law which stipulates that a permanent instructor in a State Colleges and Universities who have not finished their masteral degree will be downgraded to a temporary or probationary instructor?

  12. 4 tin-tin Apr 17th, 2010 at 4:05 am

    @ dxtrdaquarius
    eto nmn try mo link
    http://panyero.net/nakulong-sa-utang/
    HTH = Hope this help

  13. 3 tin-tin Apr 17th, 2010 at 4:03 am

    @ pagoda
    read this link and you’ll learn more
    http://panyero.net/namatay-ang-credit-card-holder/#more-34

  14. 2 dxtrdaquarius Mar 30th, 2010 at 9:50 am

    Good day!

    I have a walk-in client who used to have GLOBE text PLAN. He was not able to settle his account which reached to the point his plan is cut. He has a total bill of Php 9,000.00 for 4 months + Php 10,000.00 breaching of contract fee.

    Any advise for him?

    Thank you…

  15. 1 pagoda Mar 24th, 2010 at 2:56 am

    Hi. My father is a businessman who contracted debts in his name instead of through the company. Should he pass away before the debts are paid, what happens to the obligation should his estate prove insufficient? Will his debts automatically be assigned to us (his children)? What legal steps/options could be taken? Thank you.

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