UTANG / PALUWAGAN / LOAN

/other means of debt:

HOW TO AVOID AND HOW TO FILE
A CASE
ATTY. PRIMROSE P. KONG
 “UTANG”
debt; loan; bill; credit; debit;
indebtedness
- you borrowed money or something
of value from another
 “PALUWAGAN”
all members contribute a fixed amount at regular intervals to a
common purse while a member takes the whole sum once at
each pooling schedule.

It is an informal money-lending scheme or

save-and-borrow mechanism almost
universal as it exists in many societies
 DISADVANTAGES:
1. It is informal and unregulated
2. It is highly susceptible to swindling

3. It usually results in delinquent

payments of early-redeeming
members.
4. It leads to trust issues and
broken relationships
 ONLINE PALUWAGAN
It involves a scheduled collection of money from each member by one or a
few administrators with a promise to distribute the funds with additional
interest to all members on their respective payout schedules.
- Commonly, through the use of Facebook
 WARNING:

SECURITIES AND EXCHANGE COMMISSION (SEC)

has recently warned the investing public against online paluwagan saying that
such investment solicitations are illegal as they are not registered with the
commission.
 Scenario
Maria and Marites are best friends.

Maria borrowed 50k from Marites because her feeling

gwapo boyfriend needs it.

“feeling gwapo”
 Scenario
Until such time that Maria could no longer pay the debt. So Maria and
Marites got into a fight.

Marites then, ask for legal advice.

What should, she do?
A.M. No. 08-8-7-SC , RULE I, (2))

SMALL
CLAIMS
WHAT? PURPOSE SCOPE
 INTRODUCTION

PURPOSE SCOPE

all Claims Courts in the Philippines are a critical legal

ovation aimed at providing a speedy and inexpensive means
esolve minor disputes.

e concept of small claims involves the litigation of civil

es where the claim does not exceed a specified amount,
rently set at PHP 1,000,000.

TE: EXCLUSIVE for payment or reimbursement; interest

costs are NOT INCLUDED.
INTRODUCTION
PURPOSE
SCOPE

The primary goal of the small claims process is to enable

litigants to resolve monetary disputes quickly ; without the
need for legal representation.
INTRODUCTION PURPOSE
SCOPE

Unpaid loans & other Credit Accreditations

Unpaid rentals Unsettled debts
Contract of services Contract of Sale
of Personal property
Enforcement of barangay
amicable settlement agreements &
arbitration awards
However, it's important to note that disputes involving title to or
possession of property are not within the jurisdiction of Small
Claims Courts.
 PROCESS

SERVICE OF RESPONSE HEARING

FILING SUMMONS AND
JUDGEMENT
 Filing of Complaint

The plaintiff must complete the

required forms, available at local
courts, and pay the necessary filing
fees.
 Service of Summons:

The court will serve the summons to the

defendant, along with a copy of the
complaint.
FACTS

Response:

The defendant must file a response,

within 10 days from the receipt, either
agreeing to the claim, disputing it, or
making a counterclaim.
Hearing: The court schedules a hearing,
generally within 30 days of filing.

Judgment: The judge will issue a decision,

usually on the same day as the hearing.
The decision is final and unappealable.
Advantages
 Advantages
Speed: The entire process can be completed in a matter of weeks.

Simplicity: The procedures are designed to be simple and easy to follow, even for non-lawyers.

Cost-Effective: By eliminating the need for legal representation and streamlining the process,
the costs associated with pursuing small claims are minimized.
.
Limitations
 Limitations
Amount: The claim must not exceed PHP 1,000,000. Claims exceeding this amount must be
filed in regular courts.

Finality of Judgment: Decisions in small claims cases are final and not subject to appeal.

Complex Cases: Small claims procedures may not be suitable for complex or contentious
matters.
.
Tips for Success
 Documentation: Gathering all necessary documents, evidence, and witnesses
1 is crucial.

TIPS FOR SUCCESS

 Documentation: Gathering all necessary documents, evidence, and witnesses
1 is crucial.

Preparation: Understanding the process, requirements, and expectations

2 before proceeding can save time and frustration.

TIPS FOR SUCCESS

 Documentation: Gathering all necessary documents, evidence, and witnesses
1 is crucial.

Preparation: Understanding the process, requirements, and expectations

2 before proceeding can save time and frustration.

Negotiation: Engaging in negotiation or mediation

3

TIPS FOR SUCCESS

 [ G.R. NO. 225433. AUG 28, 2019 ]
LARA'S GIFTS & DECORS, INC., PETITIONER, VS. MIDTOWN INDUSTRIAL
SALES, INC., RESPONDENT.

Legal Interest Rate

Bangko Sentral ng Pilipinas Monetary Board (BSP-MB) Circular No. 799 in 2013 reduced the legal interest rate from 12% to 6%
per annum, as stated in Eastern Shipping Lines, Inc. v. Court of Appeals.
 The modified guidelines from Nacar v. Gallery Frames in 2013 are as follows:

When any obligation is breached, damages are
determined under Civil Code Title XVIII.
Art 2209. If the obligation consists in the payment of a sum of money, and
the debtor incurs in delay, the indemnity for damages, there being no
stipulation to the contrary, shall be the payment of the interest agreed upon,
and in the absence of stipulation, the legal interest, which is six percent per
annum.

• For obligations involving money payment (e.g., loans), • For non-money obligations, courts may impose 6% per
use stipulated interest or 6% per annum if not annum interest on awarded damages. No interest on
stipulated, from the time of demand, per Article 1169 of unliquidated claims until reasonably established. Interest
the Civil Code. starts when claim made or judgment rendered.

• However, if the rate of interest is stipulated, such stipulated

Legal interest only applies when stipulated interest is absent
interest shall apply and not the legal interest, provided the
in loan contracts, per BSP-MB Circular No. 799.
stipulated interest is NOT EXCESSIVE and
UNCONSCIONABLE DETERMINED BY THE
COURT.
THANK YOU!
- ATTY. PRIMROSE P. KONG