Final demad notice of [company removed] credit card settlement

Hello:

Thank you for reaching out. I understand how stressful it is to receive a “final notice” from a credit card company. Please note that I am the Owner and Managing Partner of Recososa Law Firm, based in the Philippines, with offices in Luzon, Visayas, and Mindanao. Presuming this matter is within Philippine jurisdiction, here is the general legal guidance.

Under Philippine law, unpaid credit card obligations are civil in nature. This means:

a.) You cannot be imprisoned for failure to pay a credit card debt. Article III, Section 20 of the 1987 Philippine Constitution clearly provides that no person shall be imprisoned for debt.

b.) However, the credit card company has the right to file a civil case for collection of sum of money under the Rules of Court if payment is not made. If they win in court, the judgment may allow garnishment of bank accounts, levy on property, or salary garnishment within legal limits.

Now, regarding your situation where you cannot pay the full demanded amount but are willing to pay what you can:

a.) You may formally write to the credit card company expressing your willingness to settle and proposing a structured payment plan. Be specific about how much you can pay monthly and when you can start.

b.) Ask for a restructuring agreement or compromise settlement in writing. Do not rely on verbal agreements. Make sure any reduced amount or installment plan is documented.

c.) Do not ignore the notice. Ignoring it may increase the likelihood of the account being endorsed to a collection agency or filed in court.

d.) If the amount includes excessive penalties and interest, there may be legal grounds to question unconscionable interest rates. The Supreme Court has ruled in several cases that courts may reduce excessive interest and penalties if they are iniquitous or unconscionable.

If the case has not yet been filed in court, negotiation is your best and most practical remedy. Courts also generally encourage compromise agreements.

Be cautious of threats from collection agencies, especially if they involve harassment, public shaming, or threats of imprisonment. Such acts may violate the Financial Consumer Protection Act and other regulations of the Bangko Sentral ng Pilipinas.

If you would like us to formally assist you in drafting a settlement proposal or to review the notice you received, we can schedule an initial consultation via Google Meet or Zoom, or you may visit our office.

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Sincerely,
ATTY. JOFRE B. RECOSOSA
Owner/Managing Partner
Recososa Law Firm