We’ve all heard the horror story. You spent way too much on shopping using your credit card. The bill arrives and you don’t have enough funds to settle your bill. Months pass and the story remains the same. Then one day, a debt collector comes calling, threatening you with all sorts of nasty things under the heavens for you to pay your bill.

Dealing with debt collection is never easy. First, biting off more than you can chew isn’t really the best thing, especially with money—and specifically with credit cards. Honestly, it’s really nobody else’s fault but your own.

But what can you do once debt comes knocking on your door?

KNOW YOUR RIGHTS

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First off, know that debt collection is absolutely legal in the Philippines. What’s not allowed is for debt collectors to threaten, use abusive and violent language, use deceptive tactics, and do false representation to get you to pay your dues. If these ever happened to you, you may report them to the Financial Consumer Protection Department of the Banko Sentral ng Pilipinas.

AVOID ADDITIONAL HASSLE

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You know you have debt. There’s no need to further aggravate the situation. Never give additional information to debt collectors, like e-mail addresses, current and past employers, your family’s details, phone numbers, credit cards, bank accounts, mailing address, social security number, and any other personal information. Besides the possible additional hassle this might bring you, another thing that this would avoid is being scammed. The collector may not be really representing the bank or creditor you owe money to.

SETTLE YOUR DUES

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Okay, so the debt collector comes knocking in, and he doesn’t do any of the above. The best thing to do then is to settle your bill. Well, you spent that money. You should find ways to start paying up for that money.

One thing you can also do—before that debt collector comes at you—is to call up your bank, negotiate for a lowered bill, and settle for a payment scheme that’s realistically doable on your part. Most people who are deep into credit card debts are not aware of this. But yes, this is absolutely allowed.

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CAN YOU GO TO JAIL FOR NOT PAYING YOUR BILLS?

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The short answer is no. According to Article III, Section 20 of the Bill of Rights of our 1987 Charter, "No person shall be imprisoned for debt..." This is applicable not only for credit card debts, but to personal debts as well. But still, banks and creditors can still sue you, especially if you intentionally run away from your debt—like changing address without informing the bank and with intent to defraud. This is credit card fraud, which can land you in prison. And even if you don’t go to jail, your assets may end up being seized by the bank.

STOP OVERSPENDING

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The ultimate tip for avoiding debt collectors? Never spend more than you can pay on credit cards. Learn to control your spending. Limit your purchases on a monthly, weekly, and daily basis. And if you can’t practice self-control, snip that credit card in half and throw it in the bin. Overspending solved.

 

* COVER PHOTO BY MARCO VERCH PROFESSIONAL PHOTOGRAPHER