I need help. The bank collectors are continuously harassing us. I admit that I am having trouble paying my credit card obligation because of my financial problem. But I am trying my best to pay it. I even offered to pay part of my outstanding obligation but they refused it. What can I do?
The fact that you used the credit card issued by the bank means that you entered into a contract with the issuing bank which allows you to buy goods or borrow money with a corresponding obligation to pay the same at a future time. As we know, contractual ties give rise to obligations on the part of the contracting parties. These obligations arising from contracts have the force of law between the contracting parties and each party is bound to comply in good faith (Article 1159, Civil Code). Thus, the terms and conditions expressed in the contract becomes the law between the parties and a source of right to demand performance of the obligation from the other party.
We take notice of the fact that the issuance of a credit card is generally tied up with terms and conditions which the credit card owner is bound to comply. These include the term of payment, charging of interest and imposition of penalty should the credit card owner fail to comply with his obligation to pay. If your contract with the bank contains similar terms and conditions, then you are bound by such stipulations. You cannot excuse yourself from your obligation on the basis of the financial difficulties you are experiencing as the same is independent from your contract with the bank.
You mentioned that you are offering to pay a certain amount but the bank refused it as it will only cover interest and other charges. Unfortunately, the bank has the right to refuse your payment. Under the law, the creditor cannot be compelled partially to receive the prestations in which the obligation consists unless it is expressly stipulated in the contract (Article 1248, Civil Code). This means that the creditor has the right to demand full performance or payment of the obligation, and he may legally refuse partial payment from the debtor.
Nevertheless, the right to demand payment of the obligation has limitations. It may not go beyond lawful means and trespass the bounds of decency and legality. Thus, the creditor may not make public defamatory remarks against the debtor in order to force him to pay his debt. In one case, publication of statements that a person is accustomed to borrowing money without an intention to pay, among others, was punished for libel (The Revised Penal Code: Book II, 16th ed., Luis Reyes, p. 943 citing People vs. Tolentino, C.A., 37 O.G. 1763 ). The use of violence is also prohibited. If the same results to injury, then a criminal case for physical injury may be filed to punish the offender. If such violence is employed to forcefully seize a property of the debtor for the purpose of applying the same to the payment of the debt, the offender may be punished for light coercion (Article 287, Revised Penal Code).
Moreover, it is possible to question the interest, penalties and other charges imposed by the bank if the same are too high. Although the parties are given freedom to stipulate and the law imposing a ceiling on the interest is currently suspended, the court may still interfere with the agreement of the parties if the interest, penalties and other charges become iniquitous and unconscionable (Olaguer vs. BSP, G.R. No. 192986, January 15, 2013). Thus, in the case of Castro vs. Tan, the Supreme Court struck down the 5% monthly interest, compounded monthly as unconscionable (G.R. No. 168940, November 24, 2009). In Ruiz vs. Court of Appeals, the Supreme Court also ordered the reduction of the 3% per month or 36% per annum interest on promissory notes (G.R. No. 146942. April 22, 2003). In both cases, the Court equitably reduced the interest to 12% per annum.
Please be reminded that the above legal opinion is solely based on our appreciation of the problem that you have stated. The opinion may vary when other facts are stated or elaborated.
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