I am indebted to a man whose business is lending money. Although I did not mortgage my motorcycle, I was told that if I still fail to pay my monthly installment, he will take my motorcycle by force as payment for my loan plus interest. Can he legally do this?
You must pay the loan extended to you when it falls due. It is your obligation that you ought to comply with. Failure on your part to pay may give rise to legal actions that your creditor may take such as to demand payment either in person or through a letter. He may also bring the matter before the barangay (village) justice system, if both of you live in the same barangay, city or municipality, which is an alternative mode of dispute resolution, intended to resolve conflicts between members of the same community. If the same fails, however, the lender may file a collection case against you and asks the court to compel you to pay.
Conversely, the method by which your creditor intends to collect the payment of your loan is not in consonance with the law. It is strictly prohibited and punishable under the Revised Penal Code of the Philippines, which provides:
“Art. 287. Light coercions. — Any person who, by means of violence, shall seize anything belonging to his debtor for the purpose of applying the same to the payment of the debt, shall suffer the penalty of arresto mayor in its minimum period and a fine equivalent to the value of the thing, but in no case less than 75 pesos.
Thus, if your creditor will seize your motorcycle by force in payment of your debt that you failed to pay on time, he may be held liable under the law. Nevertheless, to avoid this kind of situation, we advise you to settle your obligation as agreed upon or at least explain to your creditor your current financial situation and ask him to give you additional time to pay.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to firstname.lastname@example.org.