Failure to pay debt does not amount to criminal liability

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Persida Acosta

Persida Acosta

Dear PAO,
I have been unemployed for half a year now. Recently, I received a letter from a credit card company that I need to settle my unpaid loan. A friend told me that if I fail to pay, I will be charged with a criminal offense and may go to jail. Is this true?
Jimwell

Dear Jimwell,
A debtor is obliged to pay his creditor the loan that he had incurred as it falls due. As the creditor cannot force the debtor to pay, the latter’s failure to do so, despite demand, may give rise to the filing of an action to compel him to pay.

A credit card holder is also a debtor, who may be compelled to pay, if he refuses or fails to fulfill the obligation on time. Since the action is civil in nature, however, there is no way that the debtor or the cardholder may be imprisoned. The purpose of the action is for the creditor to avail itself of the compulsory processes of the court to force the cardholder or debtor to pay.

It is worthy to mention that the cardholder or the debtor’s failure to pay alone does not amount to any criminal liability, which may lead to imprisonment. As explicitly provided by the 1987 Constitution, no one shall be imprisoned by reason of debt (Section 20, Article III, Ibid.).

On the other hand, according to Republic Act (RA) 8484 or the Access Devices Regulation Act of 1998, the use of an access device such as a credit card in obtaining money or anything of value, with intent to defraud or with intent to gain and fleeing thereafter, is punishable by a fine and/or imprisonment (Section 9 (j) and Section 10, RA 8484).

Also, according to the law, a credit card holder is presumed to have used his credit card with intent to defraud, if he abandons or surreptitiously leaves his place of employment, business or residence stated in his application for 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 P10,000.00. (Section 14, Ibid.)

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 dearpao@manilatimes.net

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