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CREDIT MANAGEMENT ASSOCIATION OF THE PHILIPPINES (CMAP)
Failure to pay one's credit card debt will definitely not get you into prison. This is a rule enshrined by no less than our 1987 Constitution which states that “No person shall be imprisoned for debt or non-payment of a poll tax” (Article III, Sec. 20). This will forever be the rule such that not even a new law passed by Congress can modify or abrogate it, unless the Constitution is properly amended or revised under procedures prescribed by law, i.e. constitutional convention, constituent assembly or peoples initiative.
This therefore makes non-payment of credit card debt only a civil case. The proper case would be an action for collection of sum of money. However, Republic Act No. 8484 or the Access Devices Regulation Act of 1998 criminally punishes any act of obtaining money or anything of value through the use of an access device, e.g. credit card, with intent to defraud or with intent to gain and fleeing thereafter. Section 14 of the same law further provides that “A cardholder who abandons or surreptitiously leaves the place of employment, business or residence stated in his application or credit card, without informing the credit card company of the place where he could actually be found, if at the time of such abandonment or surreptitious leaving, the outstanding and unpaid balance is past due for at least ninety (90) days and is more than Ten thousand pesos (P10,000.00), shall be prima facie presumed to have used his credit card with intent to defraud.”
Thus, changing your residential address may be used by credit card companies or their agents such as collection agencies as evidence or proof of such intent to defraud. You may now be then prosecuted criminally under said law.
If the debt is debt does not exceed One Hundred Thousand Pesos (P100,000.00) exclusive of interest
and costs, a small claims case may be filed under the 1998 Rules on Small Claims (A.M. 08-8-7-SC, effective starting October 1, 2008) which Rule requires only 1 hearing, and any court decision rendered therein shall become immediately final and non-appeallable. This means that the proceedings will not take long unlike ordinary cases.
In the event that the debtor or credit cardholder is being harassed by credit card companies or collection agents, they may write to the Bangko Sentral ng Pilipinas (BSP) at consumeraffairs@bsp.gov.ph about the collection agency concern.The BSP issued Circular 454, Series of 2004 (September 24, 2004) which defines unfair collection practices among banks, credit card companies and other agents; mandates that banks, credit card companies and their agents must observe good faith and reasonable conduct and refrain from unscrupulous or untoward acts; and also enumerates what are deemed unfair collection practices, i.e.:
a) the use or threat of violence or other criminal means to harm the physical person, reputation, or property of any person;
b) the use of obscenities, insults, or profane language which amount to a criminal act or offense under applicable laws;
c) disclosure of the names of credit cardholders who allegedly refuse to pay debts, except as allowed under Subsec. X320.9 and 4301N.9;
d) threat to take any action that cannot legally be taken;
e) communicating or threat to communicate to any person credit information which is known to be false, including failure to communicate that a debt is being disputed;
f) any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a cardholder; and
g) making contact at unreasonable/inconvenient times or hours which shall be defined as contact before 6:00 A.M. or after 10:00 P.M., unless the account is past due for more than sixty (60) days or the cardholder has given express permission or said times are the only reasonable or convenient opportunities for contact.
Collection agencies earn on commission basis ("no collection, no commision"). Some of them are independent businesses who buy the delinquent accounts from banks or credit card companies for small amount. Some of them resort to harassment or other unlawful activities just to collect.
Action for collection of sum of money if based on written contract prescribes in 10 years.
Negative effects/consequences
Not paying your credit card debt will reflect badly on your credit history. Which means it will be difficult for you to get a personal loan when you need one.
Aside from that, some companies do check the credit history of their job applicants so a bad credit history may affect you if you’re looking for employment.
This therefore makes non-payment of credit card debt only a civil case. The proper case would be an action for collection of sum of money. However, Republic Act No. 8484 or the Access Devices Regulation Act of 1998 criminally punishes any act of obtaining money or anything of value through the use of an access device, e.g. credit card, with intent to defraud or with intent to gain and fleeing thereafter. Section 14 of the same law further provides that “A cardholder who abandons or surreptitiously leaves the place of employment, business or residence stated in his application or credit card, without informing the credit card company of the place where he could actually be found, if at the time of such abandonment or surreptitious leaving, the outstanding and unpaid balance is past due for at least ninety (90) days and is more than Ten thousand pesos (P10,000.00), shall be prima facie presumed to have used his credit card with intent to defraud.”
Thus, changing your residential address may be used by credit card companies or their agents such as collection agencies as evidence or proof of such intent to defraud. You may now be then prosecuted criminally under said law.
If the debt is debt does not exceed One Hundred Thousand Pesos (P100,000.00) exclusive of interest
and costs, a small claims case may be filed under the 1998 Rules on Small Claims (A.M. 08-8-7-SC, effective starting October 1, 2008) which Rule requires only 1 hearing, and any court decision rendered therein shall become immediately final and non-appeallable. This means that the proceedings will not take long unlike ordinary cases.
In the event that the debtor or credit cardholder is being harassed by credit card companies or collection agents, they may write to the Bangko Sentral ng Pilipinas (BSP) at consumeraffairs@bsp.gov.ph about the collection agency concern.The BSP issued Circular 454, Series of 2004 (September 24, 2004) which defines unfair collection practices among banks, credit card companies and other agents; mandates that banks, credit card companies and their agents must observe good faith and reasonable conduct and refrain from unscrupulous or untoward acts; and also enumerates what are deemed unfair collection practices, i.e.:
a) the use or threat of violence or other criminal means to harm the physical person, reputation, or property of any person;
b) the use of obscenities, insults, or profane language which amount to a criminal act or offense under applicable laws;
c) disclosure of the names of credit cardholders who allegedly refuse to pay debts, except as allowed under Subsec. X320.9 and 4301N.9;
d) threat to take any action that cannot legally be taken;
e) communicating or threat to communicate to any person credit information which is known to be false, including failure to communicate that a debt is being disputed;
f) any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a cardholder; and
g) making contact at unreasonable/inconvenient times or hours which shall be defined as contact before 6:00 A.M. or after 10:00 P.M., unless the account is past due for more than sixty (60) days or the cardholder has given express permission or said times are the only reasonable or convenient opportunities for contact.
Collection agencies earn on commission basis ("no collection, no commision"). Some of them are independent businesses who buy the delinquent accounts from banks or credit card companies for small amount. Some of them resort to harassment or other unlawful activities just to collect.
Action for collection of sum of money if based on written contract prescribes in 10 years.
Negative effects/consequences
Not paying your credit card debt will reflect badly on your credit history. Which means it will be difficult for you to get a personal loan when you need one.
Aside from that, some companies do check the credit history of their job applicants so a bad credit history may affect you if you’re looking for employment.
Related Post:
CREDIT MANAGEMENT ASSOCIATION OF THE PHILIPPINES (CMAP)
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