Legal Question in Credit and Debt Law in Philippines

I took a bank loan in 2005 amounting to P100,000, I failed to pay the monthly inst. after 8 mos. but then on 2008 I tried to settle with collection agency and paid P135,000 unfortunately I was not able to follow up so penalties & interests continued to accumulate. Then on 2011, I was told that I have to pay P300,000, so I tried to settle it again to this collection agency by paying monthly installments which today reached the amount of P108,000. Since I want to finish this issue I asked for an amnesty for all the accummulated charges but I was surprised to know that I still need to pay P264,000 payable in 24 mos. I just want to ask if this is legal, to collect P500,000 for a P100,000 loan? Please advise on how to go about it. Thank you in advance.


Asked on 9/27/12, 1:07 pm

1 Answer from Attorneys
VOLTAIRE T. DUANO VOLTAIRE T. DUANO LAW OFFICE

The interest is unconscionable or shocking to the conscience. You can contest this but you will file a case in court for damages and this will entail cost for you. The Usury law has long been suspended thus financing company are now abusing this. This will charge interest to the principal, interest to the interest and its compounded. Ask them of the computation and the total amount you have paid since the beginning. And you will find out that you have paid too much on this.

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Answered on 9/27/12, 4:44 pm


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