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.

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

  1. Lea

    Hi Atty Fred,

    I need advice regarding credit card matter. I received a call from a person saying that she is from the Phil daily Inquirer and informing me that a complaint was filed for me regarding unpaid bills and may name will be published publicly. And, I was so devastated. I am thinking that because of this my work and employer will be drag too. Least, they also gave me a number of a lawyer that filed the complaint. And upon talking to him, he said that I must pay an amnesty fee worth 50k to settle my obligations once and for all to avoid possible charges and being sued criminally and civil to the appropriate court. What should I do? Will I be imprisoned? Thank you.

    Reply
  2. Jason

    If a foreigner has a child with a Filipina and he lives in another country and she files a civil case in the Philippines against him for more support, if he loses can the Philippines court apply for an attachment to earnings with his employer abroad? Or do they only have jurisdiction in the Philippines

    Reply
  3. Frederick

    Hi! My wife fails to pay her borrowed money from private individuals in Israel. Because she wanted to finish her borrowed money obligations here in the Philippines she did not hesitate to borrow money there even with very high interest. She missed to monitor it until her salary can no longer enough to pay the interest. Those individuals force her to pay, threatened and throwing words that are so degrading. These gave her a great stress that she can’t concentrate anymore working.
    So she went home here in the Philippines. Is she still liable for those money she borrowed? Is there any jurisdiction here in the Philippines what was happened there in israel? Please be guided me. Thanks a lot!

    Reply
  4. Kiefer

    Hi just want to ask i have no work right now but i have paid my last pay and make sure that i have paid the principa amount of the items purchased on my credit is that enough to clear all the incurred interest since i cannot pay anymore for i do not have a job.

    Reply
  5. Kiefer

    I mean i have paid all the principal amount of thw item purchase on my credit card using my last pay received during may resignation

    Reply
  6. Kiefer

    Hi po bale wala na po ako work ngayon nag resign ako nung august pa pero binayaran ko po ang lahat ng item na na purchase ko sa credit card gamit ang last pay ko sa trabaho would i still be liable on the interest na bayaran kasi nag ka interest siya dahil sa 30+ pesos na kulang tapos ang interest nila is 500 pesos agad . Ok po ba na nabayaran na lahat ang lrincipal amount?

    Reply
  7. eden grace

    Hi meron po akong utang n 20,000 pesos s isang tao n ngpapautang my 20% interest at umabot n po ito ng 7months ang naihulog ko lang po ay 14000 pesos at ang utang ko ay umabot n ng 34000 pesos ngkaroon po ng paguusap s brangay at ang sbi po ay mbilis lang dw ang mga gnitong small case s prc anu po b ang pede ikaso skin at kng skaling mgsumbong ako s SEC mkakasuhan po b ang ilegal lender n tao

    Reply
  8. Nicky

    My father loaned an amount (60k) so he can go abroad last 2010.
    Apparently, he encountered issues and thus not been able to send money for us and furthermore, he also had debts to pay just to survive.
    Every now and then the bank and collecting agency sends us demand letters and now (it reached more than 500k- just because of interest. I know we do not have any amount to pay, if the bank will have an amnesty program to just let us pay the 60k, we can work for it.

    It is just last year, that he was able to bounce back and started to send us money. We were able to pay our house worth 200k which was an acquired asset. Now the house is name after my mom.

    Will the bank asks my mom (house wife) or us to pay for his debts and will get the house? (not sure if the house is collateral or not?

    Reply
  9. Jay

    I have not been able to make payment for bank loans (multiple bank) for 3 montgs now. because i ended up shouldering my parents debt to other people. The bank are informing me that they will start sending collection agent. What do this entail and can I negotiate with them to give me some more time to make good on my payment.

    Reply
  10. Maritess

    Good day! I am a public school teacher and I need your legal advise. My ATM was loaned to a lending institution- salary loan. Last November, my year end BONUS and CASH gift they had withdrawn was not given to me because it was made to pay for a separate loan that I have with them which will mature on MAY 2018. My bonus and cash gift were not committed to any of my outstanding obligation, and I requested that such must be released to me. They never did. In my frustration and anger over what they did, I declared my ATM lost and had it replaced. I did it because our PBB and other incentive is about to be released and I fear that once withdrawn, said lending institution will do the same with my bonus and cash gift, meaning they will not give it to me and will use this to pay for my salary loan, which incidentally is paid regularly through payroll deduction. Because of this, the manager of the lending institution filed an administrative case against me at the Department of Education in our Division. Is her action justifiable? Is this not a form of coercion on the part of the lending institution? I am a solo parent with 3 children and 2 grandchildren. I really need your legal advice because I can not afford the services of a lawyer who requires consultation fee. Your assistance will be deeply appreciated. Thank you very much. GODBLESSES.

    Reply
  11. Sheng

    Hi I have a loan from Doctor Cash or Moola Lending (online) loan. I actually borrowed 2,000 pesos and i agreed to settle it installment however, in my last installment period i forgot to pay the remaining 600 pesos and automatically it goes to 2,500 again so what i did i just pay again the 600. But the Since, i got financial problem. I wasnt able to settle it and after 1 year and it goes to 11,000 already and there was a collector keep on calling me and telling me to pay 2,200 to settle my account. And now i wasnt able to pay it again and they are telling to have a site visit.

    Reply
  12. Ana

    Good Day! I would like to ask an advice with regards PJH Lending Company. I have borrowed 50k from them as principal and the interest is 32k payable within 10 mos way back Oct 2015. They have given me an amount of 7,9 monthly but failed to comply but I didnt miss to give not less than 2k per month since i am paying 2 lending companies to be honest. Until now I am still not finished because they says I havent finished paying the principal and penalties as yet. I am asking for SOA but they dont mind giving me. They keep on telling me I still have 150k to pay after I pay my principal. And I dont think thats fair.

    Can someone give me an advice pls. Will appreciate it. Many thanks!

    Reply
  13. Mark

    Ako ay isang Credit Card Holder. Sa unang 1.5 years ay ok ang payment ko. Pero nitong huli ay mejo nahihirapan na akong magbayad. Umabot sa 120,000 ang due ko at past due na. Ano pwede gawin ng bangko sakin? Pwede ba nila akong ipakulong?

    Salamat .

    Reply
  14. christina

    may kaibigan po ako umutang sya sa akin ng P20200, noon pang april 20, 2017, sinisingil ko na sya pero ayaw pa rin pong magbayad.. ano po ang pwede ko gawin para masingil sya or kung merun po bang legal na paraan para makasingil po ako.. thanks and God bless

    Reply
  15. NATIVIDAD

    Good day.
    Nagkautang kasi ako from moola lending nakita ko po via facebook, ngayon po di ako nakapagbayad since na nakuha ko po ung pera, mali po kasi ung naibigay ko na account number, pinapatrace ko sana sa knila baka pwede nilang bawiin ung pinadala nila sa account na yun kaso d na daw po pwede. Nag file po sila ng case against me. Pano po ang gagawin ko about dto sa case na sinampa nila. Please i need your advise. Thank you.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *