I need your advice please.

Gd day atty.My wife has a sari-sari store in a small brgy. in the rural area where the customers are farmers.Because of successive calamities before such as el ninio, then la ninia and plant pest infestation, many farmers failed to pay their credit from our store like fertilizers, food & etc., so we applied for a loan to private lending institution in the amount of 50,000 in late 2005 payable within 1 yr.But unfortunately we failed to pay the said loan because of financial problem and resulted to closure of our store.But in 2007 my wife went to their office to settle our loan balance. It was already 178,000 becausue of penalty and interest.My wife requested them that we will only pay the said amount no more additional interest and they agreed provided that we pay the full amount within 1 year installment. So my wife paid partial payment of 100,000 from my daughter's money. After paying the total amount of 150,000 php,before the end of 1 year according to their agreement, the manager said that our balance is now 50,000 instead of 28,000.So my wife is complaining to them but they said its only a verbal agreement. So my daughter who is giving the money said it's unfair because her earnings just go to other people. We tried to settle our credit but the farmers even did not even pay their credit to us. Atty. what can you advice to me? I have other loans but we settled it little by little because my income is not enough for my family. Can we file bankruptcy to our business? But it was already stopped. Please I need you advice. Thank you.

BBC

what was the interest rate on the loan agreement.

The interest rate was 5 percent monthly excluding other charges
like service fee and notarial fee.

5 percent monthly can be considered as exorbitant. there has been a case where the supreme court invalidated an interest of 3.5% monthly. look up macalinao vs. bpi and made it 2% inclusive of penalty.

are there any bounced checks? or a trust agreement?ou

you can take the position that the amount you have paid has substantially paid for the debt and if they are to file a case in court, you will raise the defense against the unconscionable rate of interest.

Thanks for the reply atty. There was no checks involved only a promissory note. But the tax declaration of my home lot was used as the collateral of the said loan. If I cant't fully paid the said amount they asked from us, they don't return our collateral. I am willing to pay the remaining balance of 28,000
but they don't accept because they want 50,000. AttyLLL if I don't pay the remaining amount, is it possible that that my home lot will be foreclosed? Please I need your advice. Thank you very much and more power to your site.

did your loan agreement include an SPA allowing them to foreclose extrajudicially?

if negotiations fail, your proper remedy is to file a case in court for consignment and return of the tax declaration. offer to pay the P28,000.00 and ask the court to declare the debt extinguished.

Thank you very much attyLLL. There was no SPA to foreclose the said tax declaration.

in that case, the cannot extrajudicially foreclose on your property, they have to file it in court. good luck.

Thank you very much attyLLL for your immediate reply. If just in case they will not accept my 28T bal, is it ok if I will just wait until they will file this in court? Thank you once again and more power.

no, don't just wait. first write them a letter stating your position and the offer to pay the P28000. make sure you have proof of receipt of the letter. don't sit idly, keep negotiating with them.

Thanks for the advice atyyLLL.