How does a person declare bankruptcy in the Philippines?
I have a friend who is so deep in debt he never really realized until recently how much in trouble he already is. Credit card companies are already coming after him. On top of that, he also has personal loans from loan sharks and loans from his employer. He also has loans from the regular government-regulated loaning facilities. He is practically living off his overtime pay and he’s still under.
He is planning to file for bankruptcy? Is that even advisable? What are the disadvantages of this action? Are there bankruptcy filing procedures here in the Philippines?
Thanks!
Tagged as: bankruptcy filing · credit card companies · loan sharks · overtime pay · personal loans · philippines
the bankruptcy law in the philippines – insolvency act, is rarely applied to corporations, much less to individuals. the insolvency act is seldom used as entities on the verge of bankruptcy often opt to file for the corporate rehabilitation plan, which is more or less the productive and more positive counterpart of the insolvency act. for individuals, i would advise your friend to make up a list of the loans that he has and then pay them out one at a time. i would advise that your friend settle the credit card bills last. in the philippines, these are classified as clean loans where no criminal action may be instituted other than a mere collection for a sum of money. but don’t get me wrong, it is still important that your friend settle these. often, these credit card companies would offer some sort of arrangement when an account has become past due and has been referred to a collection agency. some collection agencies would even offer up to 50% off of these outstanding balances. after all, the issuing companies (credit card issuer) after some time, would have reported these accounts as bad debts and are often given tax breaks due to these. next, i would advise your friend to settle the loans due to the loan sharks. the interest that these people out on are simply way too high. the loans that he has from his employer may be let off to mature. after all, these are often pre-deducted from his salary. the loans from government-regulated facilities would be the second thing to pay off if it is not already pre-deducted from his earnings. after all, most of this loans may be settled in full at the end of the loan term. if you have more questions, feel free to ask!
I can’t speak to standards in the Philippines, but in the States nearly all bankruptcy attorneys offer free consultations. See if your friend can meet with an attorney.
I would visit http://diylegalinfo.com/bankruptcy_Links.html They have a lot of good information on bankruptcy questions.
Filing a Bankruptcy action in the Philippines is a lot different from US rules. In the US, citizens are able to file a bankruptcy under certain Chapters of the Federal Laws. Pretty much anyone who qualifies is eligible. However, in the Philippines, you must have the approval of the majority of your creditors before a Bankruptcy Action can be filed.
A new law recently pass there this year, called the "Financial Rehabilitation and Insolvency Act", provides a court-supervised rehabilitation for debtors who are able to get more than 50 percent but less than 67 percent creditor approval for their rehabilitation. However, they must not have more than 50 percent of each class of creditors (secured and unsecured creditors) agreeing to the plan. If your friend is unable to get the correct amount of creditors to approval his plan, he is screwed.
Immediately seek out the assistance of an attorney before making any plans.