Can I be put behind bars (Second of 2 parts)

As what I have shared in last week’s column, I receive this email last December 23, 2010 from a reader who is asking for my personal advice. This pertains to his unpaid credit card billing amounting to Php 104,000. The email sender decided to apply the outstanding balance of 104k with interest for the credit card’s promo to restructure the said amount.  The restructured total amount reached Php 133,000 including interests and surcharges. The email sender also revealed that all in all he was able to pay Php 40,000 after the restructured amount in which he believed is already enough to cover the principal.

However, it turned out that the credit card company already endorsed the said account to a collection agency which in turn already filed it with MTC Branch XX Makati City with civil case no. XXXXX. The email sender also, attached some documents pertaining to the said case and I took the liberty and of course time of reading it. My objective in sharing this email sender’s plight and discussing my reply with him is to help in a way, other readers who are in the same or similar situation. I believe that there are always lessons to be learned in experiences of others, sort of warning to not commit the same mistake or if the situation is beyond ones control, maybe an alternative decision could be made to avoid being in the same predicament.

After reading and reviewing the email sender’s situation, it is really an unfortunate scenario that this is filed with a regular court and not with Small Claim Court (SCC) as I guess it is already over 100,000.

However, after reviewing the attached documents, I found out that there was already a Promissory Note (PN) that was broken. This already weakens the position of the email sender. At any rate, it is advisable to reply the summons within the prescription period, in this case 10 days after receipt thereof. The tenor of the reply letter can be an appeal with the judge to condone at least the interest and surcharges and just let the email sender to pay for the remaining principal because of what happened to the deceased sister (some of the charges in the card were due to the sister’s Cancer). This is a long shot but I know of some cases that are given certain positive results due to humanitarian reason or some degree of consideration due to aggravating situations such as in this case of being jobless. But again it is not automatic; however there is no harm in trying.

Here are some tips that I offered with the email sender:

First, just tell the judge the whole and honest story - judges are also human, you can appeal to their soft spot, but the story must be consistent and believable. It will also be helpful if you could show proof that most purchases are for your sister’s Cancer condition and who unfortunately died eventually.

Second, offer and agree to a compromise agreement that can be done - don’t promise anything you cannot deliver - it will be really a point against you if you fail again. Make sure, you are clear in your position - you are not running away from your debt especially the principal - but just asking to condone the sometimes exorbitant and already unconscionable charges including collection fees and compounding interests and penalties.

Bottom line, to answer your question, you will not be put behind bars because of this unless there is fraud element or fraud intent to it.

Editor’s Note: For comments, rejoinders and questions on credit and collection matters, Mr. Ed F. Limtingco can be reached at [email protected].