COLLECTION OF SUMS OF MONEY
A contract of loan is an agreement between the creditor (the person lending the money) and the debtor (the person borrowing the money) where the debtor will borrow money from the creditor with an understanding that the amount being borrowed will be returned to the creditor in such agreed terms and conditions. Here are the following frequently asked questions:
What are the formalities of a contract of loan?
To protect the creditors’ interests, the creditors would usually require the borrower to sign a either a promissory note or a loan agreement as evidence of their agreement.
Would this mean that unwritten debts cannot be collected anymore?
Not necessarily, if the creditor can prove the loan through other documents and testimonies, enough to convince the court, then the creditor can still recover amount loan from his debtor.
What happens when the debtor does not pay the loan?
Creditors have several legal remedies to undertake to collect the sum due. There are several ways to collect the money either outside court or through courts. First, the creditors can send their own demand letters to the debtors and demand payment within a certain period.
What happens afterwards if the debtor still refuses to pay the loan?
Should the creditor just give up and accept it as a bad debt? Don’t worry, there is still hope for the creditor to collect his hard-earned money. A creditor’s next step would be soliciting legal assistance or hiring the legal services of a lawyer to file the necessary collection suit against the debtor for the payment of loan. On some instances, the lawyer will resend a demand letter to give the debtor one last chance to pay the amount loaned. Thereafter, the lawyer will directly file the necessary complaint for payment of the loan with additional damages and litigation fees or advise the creditor to file the necessary complaint to the proper court depending on the amount of loan.
Once an order of the court has been obtained ordering the payment of the loan by the debtor, the sheriff executing the order may then garnish bank accounts owned by the debtor or attach personal and real property for the payment of the loan.
If you are interested to know more about our legal services relating to collection of sums of money, you may set an appointment with our lawyers by sending an email to al.natividad@nrnlawoffices.com or call our landline (02) 8810 5580 or Mobile Number +63927 971 3727.