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Q & A on Small Claims (Utang na 200k Below) Cases in the Philippines

mico · 11 · 1606

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Offline mico

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Do you wish to collect money from someone who owes you but cannot afford to spend on heavy legal fees? Is your lessee not paying his rent but you do not want the hassle of a long court trial? Did you deliver products to your customer yet he did not pay you? Have you experienced not being paid for the services you rendered? Perhaps, a small claim action is right for you.

Please see below a simple Q & A on small claims cases in the Philippines.

 1. What are small claims?

These are civil claims which are exclusively for the payment or reimbursement of a sum of money not exceeding P200,000.00.

2. What are considered as small claim actions?

They are claims where the value of the claim does not exceed Two Hundred Thousand Pesos (P200,000.00) exclusive of interest and costs:

(a) For money owned under any of the following:

a. Contract of Lease;

b. Contract of Loan;

c. Contract of Services;

d. Contract of Sale; or

e. Contract of Mortgage;

(b) For liquidated damages arising contracts;

(c) The enforcement of a barangay amicable settlement or arbitration award on a money claim.

3. Give me examples of small claims cases.

a. Case to collect money from a person who owes you money (debtor)

b. Case to collect unpaid rental payments from a lessee

c. Case to recover the deposit made for a lease after the expiration of the lease

d. Case to collect payment for commission

e. Case to collect payment for services rendered

f. Case to collect payment for goods or property sold and delivered

g. or reimbursement for property, deposit, or money loaned;

h. Purely civil action for payment of money covered by bounced or stopped check.

i. Case to enforce settlement agreements of money claims made before the barangay

4. What is the purpose of small claims?

The purpose of a small claims process is to provide a simpler and a more inexpensive and expeditious means of settling disputes involving purely money claims.

5. Where do I file my small claims case?

A small claims case is filed with the Metropolitan Trial Court, Municipal Trial Court in Cities, Municipal Trial Court and Municipal Circuit Trial Courts. Since this is a civil case, it must be filed in the city:

a. Where the Plaintiff (the person suing) resides; or

b. Where the Defendant (the person being sued) resides; or

c. If the Plaintiff is in the business of lending, banking and similar activities, in the city where the Defendant resides, if the Plaintiff has a branch in that city.

6. What is the procedure for small claims?

a. A small claims action is commenced by filing with the court an accomplished and verified Statement of Claim in duplicate, accompanied by a Certification of Non-Forum Shopping, Splitting a Cause of Action and Multiplicity of Suits and two (2) duly certified photocopies of the actionable document/s subjects of the claim, as well as the affidavits of witnesses and other evidence to support the claim. No evidence shall be allowed during the hearing which was not attached to or submitted together with the Claim, unless good cause is shown for the admission of additional evidence.

b. The plaintiff shall pay the docket and other legal fees, unless allowed to litigate as an indigent.

c. The court examines the claim. It may dismiss the case outright if it finds grounds to justify the dismissal.

d. If no ground for dismissal is found, the court shall issue Summons on the day of receipt of the Statement of Claim, directing the defendant to submit a verified Response.

e. If the Defendant cannot be served with Summons, the court shall order the Plaintiff to cause the service of summons within thirty (30) days from Notice. Otherwise, the case shall be dismissed.

f. The court shall also issue a Notice to both parties, directing them to appear before it on a specific date and time for hearing, with a warning that no unjustified postponement shall be allowed.

g. The defendant shall file with the court and serve on the plaintiff a duly accomplished and verified Response within a non – extendible period of ten (10) days from receipt of summons. The Response shall be accompanied by certified photocopies of documents, as well as affidavits of witnesses and other evidence in support thereof. No evidence shall be allowed during the hearing which was not attached to or submitted together with the Response, unless good cause is shown for the admission of additional evidence.

h. The parties shall appear at the designated date of hearing personally or through a representative authorized under a Special Power of Attorney. However, a lawyer cannot appear to represent the party.

i. At the hearing, the judge shall exert efforts to bring the parties to an amicable settlement.

j. If the case is settled, the settlement shall be reduced into writing, signed by the parties and submitted to the court for approval

k. If no settlement is reached, the hearing shall so proceed in an informal and expeditious manner and terminated within the same day.

l. After the hearing, the court shall render its decision within twenty-four (24) hours from termination of the hearing. The decision shall immediately be entered by the Clerk of Court in the court docket and a copy thereof forthwith served on the parties.

7. Can the decision of the small claims court be appealed?

No. The decision shall be final, executory and unappealable.

8. Can lawyers appear in the hearing?

Lawyers are not allowed to appear in behalf of or represent a party.

9. Can a representative appear in the hearing?

Yes, provided that appearance by representative is for a valid cause and the representative must be a relative of the individual party and NOT a lawyer. Furthermore, the representative must be armed with a Special Power of Attorney.

10. I do not know how to make statements of claims and other legal documents. What can I do?

The Supreme Court has already made templated forms for the following:

a. Statement of Claim

b. Verification and Certification of Non-forum Shopping, Splitting a Cause of Action and Multiplicity of Suits

c. Response

d. Plaintiff’s Return/ Manifestation

e. Motion to Plead as Indigent

f. Special Power of Attorney

g. Joint Motion for DIimissal

h. Motion for Approval of Compromise Agreement

i. Motion for Execution

These forms may be secured from the courts.


Credit to: ndvlaw


"Ignorance of the law excuses no man - from practicing it. "


Pinoytambay


Offline naruto789544

well that's good news for small creditors... hopefully this will lessen the problem... how about loan sharks? can they also file claims for this?


Offline mico

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well that's good news for small creditors... hopefully this will lessen the problem... how about loan sharks? can they also file claims for this?

Yes Bro, Any person whether an individual, corporation, partnership, limited liability partnership, association, or other juridical entity endowed with personality with law.


"Ignorance of the law excuses no man - from practicing it. "


Pinoytambay


Offline naruto789544

Yes Bro, Any person whether an individual, corporation, partnership, limited liability partnership, association, or other juridical entity endowed with personality with law.

thanks for the heads up bro... i kinda thought that the law would protect the creditors from too high interest small loans...


Offline mico

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thanks for the heads up bro... i kinda thought that the law would protect the creditors from too high interest small loans...

We used to have a Usury law to protect creditors and loan sharks somehow, the ceiling on interest has been suspended effective January 1, 1983. Still, it is also worth stressing that interest rates whenever unconscionable may still be declared illegal.

In cases of those, it would still be best to bring the case to court in order to reduce the interest rate, the only problem on the otherhand are the expenses involve in filing a case and counsel's fee.


"Ignorance of the law excuses no man - from practicing it. "


Pinoytambay

Re: Q & A on Small Claims (Utang na 200k Below) Cases in the Philippines
« Reply #4 on: June 25, 2018, 11:05:47 PM »

Offline Heathcliff

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ok lang din ba na magpagawa na lang ng Loan Agreement sa notary public stating yung duration ng payments? Say payable in 1 year...until a certain definite date at kapag lumagpas ay lalagyan ng interes? Like 5% monthly...is that ok ayon sa batas?  Kase nde rin naman basta pwede balewalain ang pakiusap ng tao...





~  Amor Gignit Amorem. ~


Offline naruto789544

We used to have a Usury law to protect creditors and loan sharks somehow, the ceiling on interest has been suspended effective January 1, 1983. Still, it is also worth stressing that interest rates whenever unconscionable may still be declared illegal.

In cases of those, it would still be best to bring the case to court in order to reduce the interest rate, the only problem on the otherhand are the expenses involve in filing a case and counsel's fee.

which would you say bring the payables to almost the same amount of the loan with interest or lesser?


Offline mico

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ok lang din ba na magpagawa na lang ng Loan Agreement sa notary public stating yung duration ng payments? Say payable in 1 year...until a certain definite date at kapag lumagpas ay lalagyan ng interes? Like 5% monthly...is that ok ayon sa batas?  Kase nde rin naman basta pwede balewalain ang pakiusap ng tao...






Chef @Schy there is no need for a contract or agreement to be notarized as it would be considered binding already and in fact you can use it as evidence when it comes to filing a small claims. Somehow, in case this results to litigation, I don't think 5% per month would be acceptable by court as mentioned: "Ruiz v Court of Appeals, we declared a 3 percent monthly interest imposed on four separate loans to be excessive. In both cases, the interest rates were reduced to 12 percent per annum”.





which would you say bring the payables to almost the same amount of the loan with interest or lesser?

The court would be the one to decide, but not exactly to "almost the same amount". But with acceptable interest, like the case of Ruiz v Court of Appeals, most probably it would be 1% per month or 12% per annum.


"Ignorance of the law excuses no man - from practicing it. "


Offline Heathcliff

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salamat sa reply Micolit...nde lang pala masakit sa bulsa yan, masakit din sa ulo pati na sa kalooban. 12% per annum...5 years na kaya yun! juicekolerd.

mahirap magpahiram lalo kapag masyado ka mabait..dedma lang katapat mo. Ikaw pa nahihiya na maningil. susme... :o :book1: >:D



~  Amor Gignit Amorem. ~


Offline mico

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salamat sa reply Micolit...nde lang pala masakit sa bulsa yan, masakit din sa ulo pati na sa kalooban. 12% per annum...5 years na kaya yun! juicekolerd.

mahirap magpahiram lalo kapag masyado ka mabait..dedma lang katapat mo. Ikaw pa nahihiya na maningil. susme... :o :book1: >:D




Well the good thing Chef @Schy is that you still have 5 years to collect:

The New Civil Code of the Philippines gives light to this, to wit:

“Art. 1144. The following actions must be brought within 10 years from the time the right of action accrues:

(1) Upon a written contract;


(2) Upon an obligation created by law;

(3) Upon a judgment.”

Your right to demand the payment of the loan which you extended to your neighbor as evidenced by a written agreement commenced from the time he defaulted in his obligation to pay you. Since he failed to pay you within the one-year period as agreed upon, your right to demand the same started immediately after the said one year period expired.


 
According to the above law, you have 10 years within which to collect the loan from the borrower, to be reckoned with, from the time he defaulted. After the lapse of the said period, you can no longer compel your neighbor to pay you, as the obligation to pay has been reduced to moral or natural obligation, which cannot be enforced by the court but may be voluntarily fulfilled by the obligor (Article 1423, New Civil Code of the Philippines).


"Ignorance of the law excuses no man - from practicing it. "


Offline naruto789544

Reply #10 on: September 20, 2018, 11:51:15 PM
that's the reason why it's hard to really lend money... your goodwill might turn into a nightmare once you start to ask the return of your money....


Pinoytambay

Re: Q & A on Small Claims (Utang na 200k Below) Cases in the Philippines
« Reply #10 on: September 20, 2018, 11:51:15 PM »

 


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