Do you know that when you are in default to pay your debt on the agreed time you will be charged under the small claims procedure?
Many people in the Philippines resorted to borrowing money to make both ends meet. This is very common especially if a financial emergency happens days before the next payday. In case that it is impossible to borrow from relatives and friends, the last option is to apply for a cash loan from lenders.
The minimum amount of loan that a borrower can obtain is Php3, 000 to Php5, 000. But, the approval of the loan application also depends on the capability of the borrower to repay. In fact, there are instances in which the lender was unable to collect the borrowed amount completely.
To protect the lenders from uncollected debts, the Supreme Court has been pushing the revised small claims procedure. This will enable the lender to collect the debt payments without filing a criminal case for non-paying borrowers.
However, this new system is giving the right to the lender to file a civil case in the municipal or metropolitan court against the offenders. Under the Simple Claims procedure, the filing fee is affordable as compared to filing a criminal case. If the complainant does not have the capability to pay the fee, he or she may be exempted.
According to Chief Justice Maria Lourdes Sereno, the Small Claims is an affordable way to obtain justice. But, it does not require a lawyer’s assistance if the borrowed amount is lesser than Php200, 000. The complainant is required to pass the required documents and fill out the form.
The coverage of the Small Claims procedure includes debt, loan, mortgages, services, and rent. Once the complainant had filed the case in the municipal court, the defendant will be informed and required to answer the complaint within 30 days.
In 2016, almost 13,000 cases filed for small claims were solved.