Is there really a debtor's prison in the Philippines?

Well just keep paying more money to your internet friends and they can hopefully stay out of jail.

I actually know the person that owes the money and her family, but its true they have debtors prison?

Is it possible she lass will be banged up for fraud or theft, not the actual debt.

I've been researching this all afternoon and your comments back up what I've been reading. They'll charge her with theft. She took out a huge loan of 100000 p. and cant pay it back. At least in the states, most creditors will work with you. And it sounds like the damn interest is over the moon.

No one can be imprisoned because of a debt that is a constitutional right however if the money was taken through fraud, misrepresentation, bad faith, she can be charged for Estafa; banks do not go around charging their clients for a crime unless there is a strong evidence that she intended to defraud the financial institution; remember that money she owed from the bank belongs to the depositors of this bank

I understand all that. She does owe. She's actually paid 15000 every  week. I know her family here in the states and they've run out of money. Now they have her in the local jail ready to put her away for who knows how long. A mess! She wants to pay them but her child has gotten very sick so she fell behind on the bank.

How some places work. You take out a bank or even personal loan. You give the bank presigned post dated checks for monthly payment. If you dont have funds and one of those checks bounce, you have just performed check fraud and now have committed a crime. All assets of yours can be seized, and if none, then jail time.

That's kind of similar to the U.S. They told her she's getting sent to the main jail tomorrow for not paying the interest for several weeks because her child is sick. Since I don't have 45000 pesos to send the family, I guess they'll put her away for a while. I hate it because I've known her and her entire family for several years.

Yep, and if she dont have any family or friends to provide meals, she will go hungry.

She actually has a lot of family visiting her. It's just that I'm wondering if there will be anyway to get her out after she sees a judge? I'm wondering how they arrive at sentencing? Any Philippine lawyers out there? By the way, everybody's replies are greatly appreciated. I'm learning a lot.

eric1008 wrote:

I understand all that. She does owe. She's actually paid 15000 every  week. I know her family here in the states and they've run out of money. Now they have her in the local jail ready to put her away for who knows how long. A mess! She wants to pay them but her child has gotten very sick so she fell behind on the bank.

What did your friend's sister tell the bank that she needed the money for? Did she issue checks which had insufficient funding? Did she lie on her loan application such as misstating her source of income, not disclosing existing loans, etc. As Cynthiavilla said:

"No one can be imprisoned because of a debt that is a constitutional right however if the money was taken through fraud, misrepresentation, bad faith, she can be charged for Estafa; banks do not go around charging their clients for a crime unless there is a strong evidence that she intended to defraud the financial institution"

The story about how she got into this mess is also confusing. You say your friend's sister owes 100k.  Is that like the entire loan, or is that a balance from a larger loan, or is that interest and penalties, or is that past dues? I'm asking because it's kind of unusual that a bank would go through the trouble of having someone imprisoned for 100k debt. Or is that several months past due and the loan is actually in the millions. There is something amiss in the story. Sounds more like the money is owed to a lending institution.

For how many weeks or months has she skipped paying? What are the terms and for how long? What do you mean by "She's actually paid 15000 every week"?  So, for how many weeks has she been paying?  Why do feel like sending her 45k which you say you don't have the money for? Why 45k? If that's just what she needs to pay, then the less the bank has incentive on charging her with a crime, and more incentive to come up with some sort of payment plan.

If I were in the states and the debtor were my sister, I'd try to bail her out anyway I can. If I didn't have cash, I might get a cash advance from a credit card, either from just my card or if that's not enough, ask family members to pitch in.

That's about $1,000 US, meaning she took out a massive loan by local standards so, unless she's pretty well off and it was something she could afford when she took the loan, she probably never intended to pay it back.

Did you lose her income?

Please refer her to a public attorneys' office; or go to any branches of the integrated bar of the Philippines for legal services; this is a serious matter;

She cannot be imprisoned there has to be a legal process; was there a complaint filed in the fiscal's office? Was there a resolution if there is

I know that she lives in irosin, bicol and is poor as you can get. I seem to recall that her sister said she put the house up as collateral.

Please refer her to a public attorneys' office; or go to any branches of the integrated bar of the Philippines for legal services; this is a serious matter;

I'm emailing the family in the Philippines. They said something about needing to pay 45000 pesos by tomorrow or she gets taken to the main jail where it'll be hard to get her out. She hasn't paid interest for 2 or three weeks they tell me. I can't see how a legitimate bank would loan 100000 to a person in bicol!

I smell a scam.

I also do not see how she will be jailed; was there a warrant of arrest; what is the 45000 for? Too high for bail! Was there a demand letter from the bank to pay this much! Just seek the advise of a PAO lawyer; foremost was there ever a written complaint! Fraud still need to be proven in a trial 1st;

Here's what the family emailed me. It was a bank loan for  100000 pesos. The 45000 p. is for 3 weeks interest that they are demanding, or they "take her to the main jail.". They also said something about the 45000 will "move the contract for 6 months". I was told she used the house as collateral. Is this making sense?

There is no warrant of arrest issued. They are giving her until tomorrow to pay the 45000. There was no mention of a demand letter served, either.

Of course if it is the bank, there will be a written demand letter! Just wait for a court order for her to appear before the court; if she is imprisoned, without the resolution of the prosecuting officer, this is highly irregular and fishy! The policemen who apprehend her can lose their jobs; so if a policeman comes to pick her up, then that is the time to get a lawyer; I am making assumptions on the basis of your story!

There are good lawyers in Bicol who will help her; they come from PAO and the Integrated Bar of the Philippines; they can be found in the  Hall of Justice of Bicol

I don't know if anyone else has noticed that the sister's story is starting to smell fishy. 45k interest for a 100k loan? That needs to be paid in a few weeks? With a side story about a sick son to pull on your heartstrings? That they need the 45k NOW, or else she will be moved from city jail to the "main jail", which I guess is the family's term for prison.

And besides, the property was used as a collateral. How can the bank have your friend's sister arrested for not paying on her loan, and at the same time have a lien on the property that's valued more than the loan. The bank can just take the property.

My advice to you: DO NOT SEND THEM ANY MONEY --  NOT A SINGLE CENT.  THIS IS THEIR PROBLEM, NOT YOURS.   DO NOT MEET OR TALK WITH THEM FOR A FEW WEEKS (OR EVEN MONTHS), AS THEY MIGHT CONVINCE YOU TO "LEND" THEM YOUR HARD-EARNED MONEY THAT YOU MIGHT NEVER SEE AGAIN.

I won't be surprised if they tried to do some other tactic, like offering that you buy the house for say 400k as an investment since it's  "sayang" to lose it to the bank because it's worth a lot more than the 100k loan.

eric1008 wrote:

There is no warrant of arrest issued. They are giving her until tomorrow to pay the 45000. There was no mention of a demand letter served, either.

I am truly wondering how this thread has survived this long!!!..Why hasn't the STAFF shut it down yet...IT is obviously a scam looking for a soft hearted  SUCKER to front the money by contacting the initiator of this thread...

"A fool and his money are soon parted"

I appreciate your knowledge and advice. I got more information then I could hope for. I'm going to take a wait and see attitude with this whole thing. Maybe this is why the family in the states have stopped helping ? I don't get it because I've known the family and the girl for 7 yrs, but I always thought the 15000/week was high for a bank loan.

Wow. You need to relax. Nobody's looking for anything but information. Shut down a question about debtors prisons in the Philippines? I asked for information and got lots of it about a topic I knew nothing about. Which I really appreciate. If that bothers you, great.

This is good discussions! strange things really happen in the Philippines. Banks (small rural banks), policemen, lawyers, doctors, etc. are potential scammers; so the only way to do if people wants to help is investigate and look at the paper trails and not simply let go of your money.

Thank you so much the advice! You are a good person to educate me. I forwarded the information to her and the family. The Philippines is a lot like Mexico, legally speaking. Very complex. In the meantime, We'll see what happens to her.

The family said the loan is for 100,000. She owes 45,000 for 3 weekly interest payments at 15,000 per week. Did she take out a 2 month loan (8 weeks x 15,000 per week = 120,000). Banks don't make this type of loan to people who have no money. The bank can take the house, but there is no way that this is a true story. If her salary (maybe) is 10,000 per month, where did the bank expect her to get 60,000 per month to cover the payments??
If you pay the 45,000, wait for the next email about the sick child who needs an operation to live, only 95,000 pesos.
SCAM

So you can sleep better at night, do this: Have your friend scan and send you all the bank info, payments, terms of the loan, phone # of the bank and who to talk to. Call the bank and see for yourself. Don't be surprised if you don't receive anything, but if you do, call the bank, say you are the one who will be paying the loan. Then decide want you want to do.

Caution..thread lightly ..this entire matter sounds a bit off kilter. Have you personally  taken the time to gather the facts for yourself vs he say she says? For example, what is the name of the jail or prison where she is being held? What is the name of the bank? You can always offer to pay directly to the bank. If the family make excuses for not releasing that information. Then your worries are really unfounded. Start there if you are that concerned and see what happens.

eric1008 wrote:

I have a close friend who said her sister is going to prison for owing a bank loan of 100000 pesos. Do they still have such a thing for debtors? If she does get sent away, how hard is it to get her out? I really am worried about this.

The OP is dubious.

However for the sake of every one, There is no jail time for debtors in the Philippines. A person can not be jailed for unpaid debts, that is in the law books. None.

However there are exceptional cases. If the debtee/creditor files for recovery of the debt in court and the court sent a letter order to your sister to appear in court and your sister ignored  that court letter,  your sister will be arrested, for ignoring the court order  not because of the debt. In your local dialect, 'aarestuhin siya dahil binalewala niya ang summon order ng korte'.

If your sister signed a contract with the creditor, and she failed to follow/honor the contract then your sister will be civilly or criminally liable in law. She can be arrested. Just ask any law students about OBLIGATIONS & CONTRACTS, they know the meaning.

If the amount is small, the creditor can go directly to the court to file a SMALL CLAIMS CASE against your sister. This is where the court will send a summon order to your sister to appear in court. If she ignores the summon, she will be arrested and detained. Read above paragraph.

Tell her to settle by installment basis.

eric1008 wrote:

Here's what the family emailed me. It was a bank loan for  100000 pesos. The 45000 p. is for 3 weeks interest that they are demanding, or they "take her to the main jail.". They also said something about the 45000 will "move the contract for 6 months". I was told she used the house as collateral. Is this making sense?

There ain't no bank in Philippines charging 45000 weekly. SCAM!

Doesn't make sense.

Is it a real Bank loan?
Or an Indian 5-6 loan, which can be about 20% per week, at their normal rates.  So, 45,000 pesos would be close to that three weeks interest at those rates.

Obligations and Contracts are civil cases; the penalty for breach are actual damages; and interest; no jail time; there maybe other damages such as nominal, etc. remedy is garnishment; if the debtor has no money and no assets, sorry for the creditor; no way he/she can recover; that is why creditors asked for collateral; by the way, a person even the complainant who does not respect the court's summon, he/she can be held in contempt of court; unless that person can prove in court that he/she has a justifiable reason why she cannot make it; i.e. accident; sickness;

The bank or anyone for that matter who are creditors who wants to put a debtor in jail should file a criminal case and prove in court that there was an intent to defraud; in civil cases there is no jail just recovery of what was loss or damaged;

The Philippines has a very good written law;

But this point was made, which is an excellent point:

And besides, the property was used as a collateral. How can the bank have your friend's sister arrested for not paying on her loan, and at the same time have a lien on the property that's valued more than the loan. The bank can just take the property.

So the op was answered, which is no there is not a "debtor's prison"!!

But what is lacking here are all of the facts surrounding her situation.  Sounds like there is a lot more to this story or as some have pointed out, this story might be questionable.  Since the interest amount is disproportionate to the loan.

Many facts are lacking here!

rjcash wrote:

So the op was answered, which is no there is not a "debtor's prison"!!

But what is lacking here are all of the facts surrounding her situation.  Sounds like there is a lot more to this story or as some have pointed out, this story might be questionable.  Since the interest amount is disproportionate to the loan.

Many facts are lacking here!

AGREED!! And anyone who would believe it has to be a blooming IDIOT..