Legal Advice of Collecting Debt

Hi, I am a newbie here.

I need legal advise sa concern ko. May nakahiram sa akin ng total 550K. This started sometime in 2005. A good friend borrowed money to fund their family business. He used their house & lot as payment; meaning, the borrowed money will be my initial payment at magbabayad pa me sa kanya ng certain amount for a specified no. of years.

However, after 3 months, nagkaroon ng problem sa family nila at tinanggal sya sa pamamahala ng business nila. This prompted us to visit him para pag usapan ang nangyaring agreement. Nde na sya mahagilap. Ang nadatnan na lang eh ung Nanay. Nakwento namin ng buo. So in short, in behalf of the anak, nag assure ung Nanay na babayaran ng buo ung borrowed money pero ala syang pinirmahan na agreement na ganun.

Around December 2008, 3 years passed, nakontak na din ung anak. Nag usap kami at gumawa ng panibagong written agreement.. that is, I just have to pay additional 500K at sa akin na ung bahay at lupa nila. Plus, ako na din ang magbabayad ng Pag-ibig monthly amortization. Naka-loan pala sa Pag-ibig ung bahay at lupa. Currently tenanted ung bahay with 12K monthly rent.

Before we give the total amount, nagbigay muna kami ng 100K and requesting them to present mga documents (Titulo, Pag-ibig Loan agreement, at pati ung Contract of Lease/Rent). Nagkaroon ng usapan na sila magbabayad ng unpaid taxes nung property.

The second meeting daladala ung ibang documento na hinihingi namin. This time, binago ang usapan. Babayaran daw namin ung unpaid taxes around 120K++, then ang makukuha kong rent eh 8K (not anymore 12K), then pay ko ung Pag-ibig restructure na 80K++. Or in short, magdagdag kami ng 200K (from 500K to 700K) para sa akin ibenta ung house & lot.

Totally nag back-out na kami. Nagkaroon ng written agreement na ibabalik nila ung 100K on March 25, 2009 at ung 550K on June 2009. Pag nde nila naibalik ng buo ung 550K, there will be 2% interest per month.

Until now, nde pa naibabalik ung 100K. Ala daw sila pambayad. Tapos ung 550K eh ala din silang kibo. Ung pinakabagong written agreement is signed by the Nanay, my sister and my father.

For 3 years nde nila kami kinibo at nde nagbayad ni isang kusing ng interest. Totally nabalewala na ang interest ng 3 years. Tapos this time, ganun ganun lang sila makipag usap. In this case, ano po ang magagawa ko para magbayad sila? Appreciate any legal advice from anyone.

Thank you.

It's time for you to hire the services of a lawyer. Your lawyer will first send a demand letter and if they failed to pay within the period indicated, a court case may then be filed against your debtors. Of course, your demand will include interest in accordance with your agreement.

Thanks for the advice. Is there any lawyer/s that you may recommend? It will be my first time to file a court case and I don't know any lawyers.. much more, is the fee expensive? The Mother has two locations, one is in the province somewhere near Lingayen, Pangasinan and their other place is in Fairview, QC (this is where the property House & Lot that they've used as a collateral located at).

Look for a lawyer who will charge reasonable fees. Here are the usual fees: (1) Acceptance Fee - fee paid to the lawyer for accepting your case. The client's capacity to pay, the amount subject of the case, difficulty of the case, status of the lawyer, etc., etc., are several factors to be considered in fixing the acceptance fee. If you find the acceptance fee somewhat expensive, you can bargain with the lawyer for a reduction. You can even request to pay the acceptance fee on installment. (2) Appearance Fee - fee paid to the lawyer for attending hearings/meetings; (3) Pleading fees - fee paid to the lawyer for the preparation of pleadings to be filed in court. There is also a "success fee" in case the lawyer succeeds in recovering from the other party. This constitutes a certain percentage of the amount recovered.

You will also incur filing fee which constitutes a certain percentage of the total amount of your claim. This fee is not paid to the lawyer. The filing fee is paid to the court (Office of the Clerk of Court).

If you will file a case for collection, the venue will either be:(a) the court of the place where you are residing; or (b) the court of the place where the defendant is residing. The choice is yours. Most of the time, the complainant opts to file the case with the court of the place where he is a resident.

oh, thank you thank you so much!!! this is indeed a very good learning for me. I never expected there are lot of "fees" for filing & processing a court case.

On a personal advice. do you think it is worthed to bring this to a court case?

I am wondering, from the amount Php550K, how much estimated would be the 'remaining' amount that I could have noting of the many "fees" that I have to pay?

Again, thanks!

It is always worth it to pursue what is due you. Besides Php550K is not a small amount that you can easily let go.

Since you mentioned that the Php550K is subject to interest at 2% per month and that the agreement to pay interest is in writing, the law gives you the right to recover the principal plus interest charges pursuant to your agreement. In some cases, the courts reduce the rate of interest to the legal rate of interest (12% per annum) in case the interest agreed upon is excessive and unconscionable. 2% per month (24% per annum) is not excessive so you can definitely demand for the full rate. Do the computation to determine how much interest will be earned per year. If you find a lawyer who is not overcharging, I am sure that even with the lawyer’s fees, you will be able to enjoy more than the full amount of the principal. I suggest that when you consult a lawyer, ask him thoroughly all about the fees that he/she will charge.

thanks again! all of my major inquiries were being answered by you.. thank you Sir!

The one who borrowed the money is the Son. Now, the Mother is the one handling all these; thus, she is the one who signed in the agreement that the amount 550K borrowed by his son shall be fully returned in June 2009. If in case it was not returned in full, a 2% interest per month shall be in effect and that interest amount shall be collected on a monthly basis.

The another 100K which were given to them also included in the agreement that they will return on March 25, 2009. But up until now, they haven't paid any single cents. When they were followed up, they just say they don't have available money to pay. But that agreement was made in February 2009 and that date came from them.

Currently, just this week, we cannot contact them anymore. So this gives an anger in us. For 3 years, we throw away the interest of the money and made a new agreement. Now, they are playing deaf again. The husband (already deceased) of the mother is the bestfriend of my dad. Hence, my dad is angered by their attitude in fulfilling the promised they made on a face-to-face talk.

I am planning to buy a property and I am planning to use the amount for the DP Equity of the property. If this will be bring to a civil case, I think this might take a long time... Right?

Again, thanks again.