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.

166 thoughts on “No One can be Imprisoned for Non-Payment of Debt

  1. Gervi Jill

    Hi. My friend borrowed cash to me of P5000 & made a lot of promises to pay. I asked her to write a letter if when she will pay me the said amount. My habol mo ba ako? I badly nees your help . Thank you.

  2. katherine

    My cousin is living in london fir the past 6 years now and i received letters of unpaid credit cards which sge did not even applied for here in the phillipines .what would she do now to clear her name b ecause she diid not even see and used that card .the credit collectors are asking her to pay

  3. Pao

    Hi i want to ask if u have credit in lending company its cost of Php.7,000.00 and suddenly i don’t pay it for 3yrs it would be called estafa? Or he can they can file me a case? But now that credit is not exaclty 7k because i pay before some.reply please thank u.

  4. Gem

    hi sir, hingi lang po sana ako ng advice. mayroon po akong credit na naiwan halagang 15,200 sa isang taong asawa ng pulis na naka assigned sa malabon rtc. nung nawalan po ako ng work ininform ko po yung lender na maantala yung payment dahil po sa nawalan ng trabaho. nag agree naman po yung lender. natagalan po bago ako nagkaroon ng communication ulit sa lender dahil yung simcard ko po ay nasira at nawala yung contacts ko. that time umuwi po ako sa province and due to some issues nagka delay delay yung payment. Nung time na po na mag start na ako sa work and kukuha na ng nbi nagka hit po ako. so i asked the person in charged sa nbi and yun daw may case daw ako. so, ang ginawa ko po humanap ako ng way na makuha yung no. ng lender and tinawagan ko po sya immediately asking about the issue. sinabi niya po na nag file siya ng case which is estafa and may warrant of arrest daw po ako. wala po akong natanggap na subpoena o any documents kasi po nasa province ako nung nag file sya. nakiusap po ako na magpapadala po muna ako ng paunang bayad na 6,000 thru her BDO savings acct. and pinuntahan ko po sya sa malabon . yun po pinakita niya sa akin yung documents about sa case. nakiusap ako sa kanya na tulungan akong makakuha ng nbi kc di po ako makaka work at paano ko po sya mababayaram kung wala akong trabaho. inadvice nya po ako na magbabayad sa court ng 18,000 pero refundable naman daw yun pero hindi nga lang buo ang maibabalik. Ano po kaya ang gagawin ko? Salamat.

    1. Maya

      Totoo ba yun. Kapag nakakuha ka NBI makita nila nagfile sila sayo. Kinakabahan naman ako. Meron ako hindi na settle. Due to financial problem. Lalo na may binabayaran ako na utang na hindi naman sakin.

  5. iRENE

    hihingi lang po ako ng advise may utang po ako sa credit card na hindi ko pa nababayaran gusto ko po sanang i settle ito ng installment pero nung nakipag communicate ako sabi ng collection agency nakademanda na daw ako at anytime dadamputin na ako , may mga tumatawag pa sa akin na mga police supt sila at may hawak na daw silang arrest warrant , tama po ba ang giangawa nila ang takutin ako ?

  6. StiffedCustomer

    I am looking for some legal assistance for this problem. I conjured up my life savings P13M in 2010 to purchase silver metal from a Philippine business. As he requested, I paid in full in advance upon his commitment to deliver. He accepted my payment but failed, even refused, to deliver. He appears to want to file for bankruptcy and leave me penniless. Since the size of my order is more than ten times his reported sales for the year in question, he obviously did not report the sale on his AFS. I have evidence he withdrew about half of the proceeds of the sale to purchase items for his personal ownership.

    I believe (but am not sure) a customer with an undelivered order for which he has fully paid, is an “interested party” in the corporation (like a shareholder) and is prejudiced by the removal of funds from the corporation (for the personal benefit of the CEO) which render the corporation unable to meet its obligations. Is this a valid argument?

  7. Angela

    Ask ko lang po, kasi di ko na po kasi mabayaran yung credit card bill ko, ngayon lagi akong tinatawagan ng collecting agents at sinasabihan na makukulong ako, paghandaan ko na daw at magipon na daw ako para sa abogado ko. Makukulong po ba ang di pagbayad,nawalan po kasi ako ng work before kaya nastop po ako ng pagbayad, ngayon sapat lang po sahod ko/;

  8. Sansan

    Hello po. May konting negosyo po kami ng husband ko noon at may kasosyo. Nagkaroon ng problema nang ang naging partner niya nanghiram ng pera at di kami binayaran. Ang masaklap loan ko po yon sa cooperative na P 100k tapos naging 62+k ang bal. Pero may share cap ako na 40k sa cooperative. As of this year umabot na ng almost 200k ang utang ko. Di na ako nakapagbayad since ubos na ang resources at wala na ang negosyo . Wala rin po akong trabaho at isang driver lang ang asawa ko. Pinadalhan po ako ng letter of demand from the cooperative para iharap sa husgado. Makukulong po ba ako? Ano po ba ang pwede kong gawin dito? Pls. answer me.

    Thank you a lot po…

  9. Maya

    Hi Good day!

    Meron lng ako itatanung regarding sa may kaibigan ako. Humiram nang pera sa tao at ako ang nakapangalan. Nagresign na at ako nagbabayad. Hindi na ako kinakausap. Meron ba ako pwede i-complain sa kanya. Apektado ako kasi may mga bayarain ako sarili. Tapos ako pa nagbabayad nag utang niya.

    Thank you.


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