Once a loan becomes due and demandable, as when the agreed time for payment has arrived, the lender may already proceed to the borrower and ask for payment. The lender may choose to collect extrajudicially – that is to collect payment from the borrower without aid from any court of justice; or, if the borrower adamantly refuses to pay the lender, the latter may go to court and collect money judicially.
In extrajudicial collection of debt, the lender may simply write a letter to the borrower demanding for payment; or the lender may put on more effort and go to wherever the borrower may be seen to demand payment. In either way, the lender has to state that the debt has become due and demandable and that the payment is being demanded from the borrower. If the borrower continues to refuse to pay, the lender may then proceed to send his final demand letter – a letter containing a statement to the effect that should the borrower still refuse to pay, the lender may proceed to file legal actions against the borrower. If the borrower takes the final demand letter for granted, the lender may now seek assistance from courts in collecting money owed him – he may now file a civil case for collection of sum of money.
It is worthy to note that although collection of debt in the Philippines may be done judicially or extrajudicially, it is still better if a lawyer can guide the lender in the collection. This way, negotiations may be reached, and terms favorable to both the lender and the borrower may be agreed upon.
