Small Claims

hi! somebody owed me money worth P80k and used his car as a collateral. the cash money i lent him was actually derived from a cash loan i processed through my credit card, 12-months term, with interest. since we are not related at all, we agreed to create a payment schedule where he could complete the payment in 6 months. as part of the agreement, we also created a deed of sale for his car which will be effected the minute he misses any payment.

unfortunately he lost his job, and missed to pay as planned on the 3rd month. considering the situation, i did not insist on any payment yet and waited until he had time to get back on track and find a new job; on the 5th month, he finally confirmed that he will try to start paying back. since the monthly amortization from the bank is P7k, he posted a P3,500 payment. unfortunately, that was all i got for that month.

from the 6th month onwards, it was a struggle to get a hold of him and have him own up to his word. there were several instances where he even bargained to pay just P1500 per pay-day or a total of P3000/month as this is the most he can spare me.

on the 2nd week of Sep (12th month), he finally revived communication and paid up P1500. once again, he claimed that he can only allot a total of P3000/month.

Saturday night after which, i saw him in a bar and was shocked that he completely ignored me. To make things worse, he's now driving a new car!

I've just finished paying the 12-month long Cash Loan i processed for him last year. I've been more than cordial in understanding his situation, hence even though we had an agreement i never thought of filing a case against him. NOW that I saw him with a new car (so money doesn't seem to be much of a problem), I'm not sure if it makes sense still to agree to a new payment schedule of P3000 per month, ending in 2012.

If he would still claim that he can't go beyond that, can i reference the agreement we had last year where he used his old car as a collateral?

Please please help... Sorry this was kinda long.. I felt it was just appropriate to provide some context..

Help...

is the car still with him?
was it registered in his name?
is your collateral agreement notarized and registered in the LTO and Register of Property?

I recommend that your first step is to send a letter demanding full payment. You can send it personally or through registered mail with return card. it is important that you are able to show that he received it. If he fails to pay, you have several options.

If the car is with him and is worth more than the loan, you can consider filing a case of replevin to take possession of the car. your right is derived from the collateral agreement that the car becomes your property.

If the car is no longer with him but you did not register your encumbrance with the LTO, then i recommend that you just file a civil case. if the amount is less than 100k, then you can avail of a small claims case. the rules are on sc.judiciary.gov.ph.