How to deal with Credit Card Debt in the Philippines
Yes, I am a credit card defaulter.
Now that THAT’s out of the way I would like to share with you what I have learned while researching how I could best pay off my debts.
First note: I am a defaulter NOT a defrauder. Those are two very different things.
A Defaulter is someone who, for one reason or another, is not at the moment capable of paying his credit card debt.
A Defrauder, on the other hand, is someone who used false information to acquire the credit card in the first place. This is what happened in Singapore recently when several people from a credit card sales company were arrested for falsifying employment details of several clients just so their applications for credit cards would be approved by the issuing banks.
I am a defaulter. I had used my credit card, when it was active, to buy groceries to feed my family and pay household utility bills. I didn’t even use the cash advance facility, because my issuing bank had not enabled it for my account. I was settling my bills back then, every payday via online banking, because our payroll bank was also my CC issuing bank. I could pay direct from online access.
Then Typhoon Ondoy struck. And from then on I had been unable to make payments on the card. Too many repairs on the house, too many furniture rendered useless and needed replacement. I had maxed out my card and had to use cash on hand for purchases.
I am writing this now because a law firm has contacted me by mail, and is now demanding that I pay an amount that is more than three times my card’s credit limit, and to pay thirty percent of that amount within the next five days to avoid litigation. When I contacted the law firm to confirm and negotiate I was told that the payment was necessary before they could send me the restructuring agreement. In the meantime I had to come up with several thousand pesos to give to them.
While I was pondering how on earth I was to manage that when I was currently jobless and sending one child to college, I recalled a conversation I had with a friend recently. He had mentioned that people in the legal department of any company usually had a difficult time getting a credit card, and that was mainly because credit card issuers know that these people knew their rights.
And what are OUR RIGHTS, as credit card holders now unable to make payment for one reason or another?
I looked this up in Google — something I should have done long ago — and I found these two blogs:
Clickmarbin, in his blog post How to Deal with Credit Card Debt Collectors in The Philippines? has made be breathe easier by informing me of my rights as a credit card defaulter. In addition to that, he has also written this: A Credit Card Debt Collector in The Philippines Can Tell A Lie.
Further reading revealed another source, Mr. Banker, in his blog post Utang – What I’d Do!. This is one of many very informative and down-to-earth advice for credit card defaulters, in his blog DISKARTE (Guidelines on Credit Cards Paranoia).
These two bloggers have helped me sleep better after I read their articles, knowing that I am EMPOWERED TO PAY MY DEBTS, but in a manner in which I can afford.
Here is an excerpt from Mr. Banker’s blog:
1. Ask for a Statement of Account
This is the FIRST step. You mean you will just accept ANY amount just because of their say so?…. okay, I give up then. go ahead, pay.
Otherwise, you cannot go to Step 2 without resolving this issue first.2.Once received, review.
Is it duly signed and certified correct by an authorized bank signatory?
You would not want a janitor signing your SOA, would you?3.Offer what you can afford ONLY,not what they want.
You are the one responsible for its payment,not them.
propose reductions or waivers.
(especially those excessive charges!)4.If there’s an Agreement,document it!
no verbal agreement. they can deny it later on.5 If they won’t agree, don’t force yourself to pay even if you cannot afford.
it will just dig you deeper further into debts.6.Since no agreement can be made,let the court to decide.
(definitely, the court will reduce it!)So now, you have your reason everytime they call.
How can they collect when you are still asking for that SOA?
How can they charge you with RA 8484(Intention to Defraud)?
How can they file a case when you are willing to settle it?Learn from your lessons after that. Avoid making the credit card as your financial crutches.
Perhaps the most important advice is the last line. Contrary to what some readers may think, Clickmarbin and Mr. Banker are not advocating non-payment. What they are advocating is CREDIT CARD DEBT PAYMENT within one’s means.
I may be a defaulter, but I am by no means a defrauder. My credit card issuer has my complete contact details, and so does the collection agency. I answer my phone calls personally and I do reply to text messages and calls when I am able to do so.
No credit card collector has the right to bully me into paying an exorbitant amount to “settle” my debt. No credit card collector has the right to coerce me into paying by sending threatening text messages, or pretending to be sheriffs who can come into my house take away my property in payment for my debt. I am not hiding, they know where to find me. I am willing to pay, but within my means.
I hope whoever reads this and happens to be on the same boat as I am will visit the other blogs that I have linked to above, and know that we do have our rights and that we should uphold them.
I feel yeah. I am a defaulter too. I am currently in outside the country trying to save so that i can pay them in full. I actually dont know how to start with my life having all of these cc things.
mark
25 Mar 11 at 3:02 am
Hi there Mark, sorry it took me so long to approve your comment.
Everytime I feel down and out because of this relentless collector hounding me, I read Mr. Banker’s blog. It always gives me the strength to hold my head up high again.
Make it a habit to read his blog too, I assure you, he will boost your spirits as well.
the accidental geek
9 Apr 11 at 7:18 pm
1. If you’re a credit card defaulter, are you put on a credit card blacklist/defaulters’ list by a credit card company?
2. If the credit card company is global (Citibank, HSBC, etc), can they post your name in newspapers?
3. Is this blacklist/defaulters’ list accessible by all banks globally? Do they list your defaulted/debt amount?
4. If you are a credit card defaulter, can you open a savings account in that same bank? In other banks?
Queeny
26 Apr 11 at 8:34 pm
Hello Queeny,
The answers to all your questions are in Mr. Banker’s blog. Some of it is covered by the BSP Circular 454.
A simplified excerpt also appears on the JLP Law blog:
http://jlp-law.com/blog/credit-cards-and-unfair-collection-practices/
the accidental geek
27 Apr 11 at 8:42 pm
hey, the accidental geek.
high my spirits are now because (1)quick your response has been (2)like a lighthouse the sites you directed (+Mr. Banker’s blog) indeed.
thanks from me you deserve.
may God be w/ u always, in all ways.
Queeny
29 Apr 11 at 4:16 pm
the accidental geek,
I’ll try to visit and answer most of the questions of your blog.
No promises.
But I always do.
banker recently posted..Secrets Of Credit Card Diskarte
banker
5 Jun 11 at 4:56 pm
well said! done with so much grace & passion.
sogeumhuchu
17 Jun 11 at 10:38 am
I have a credit card before that was 1996 from citibank and i just want to know my SOA so that i can pay my dedt account.
Thank you.
Sukarno Mantukay
6 Jul 11 at 10:11 pm
i am relive when i read this blog thank you so much……now i know how to deal with them, thank you for make me easily to sleep now and im not feel guilty for it thank you…thank you…
GIE
15 Jul 11 at 8:20 pm
Hi!
would you be able to attach a sample letter of request for an SOA…, would really appreciate it so much… thank you..
roi
26 Jul 11 at 3:59 pm
Thanks for the info.
Anyways… So, how was your cc now?
Ayi
9 Sep 11 at 11:10 am
I’m a credit card defaulter, currently I have 11 credit cards and 3 bank loans. Out of 11 CC, 3 of them are under Amnesty Program but I’m worried as I can’t commint monthly minimum dues. (I only pay less than minimum dues for I have no more money, no funds other than my job). Every now and then different banks are calling me at the office and my mobile phone, forcing me to pay and threathening me that if I can’t settle it my account will be forwarded to LEGAL CASE. I’m very much worried for this matter as I have a 6 months old baby and my husband is still unemployed that’s why I have no other means of paying my debts. As what I’ve told them I am incapable of paying my obligations due to my present condition but still they are forcing me and threatening me. STANDARD CHARTERED collectors said that they will visit me in the office to collect money, but I told them that if they do so, I might be terminated (because they will be visiting me during office hours) so I told them to visit me in the house rather than in the office.
Hopefully, you can give me advise on what I must do. I’m very depressed, cant sleep becuase of my worries and feel self pitty.
Thanks a lot and hopefully you can reply on this.
Janelle galido
17 Nov 11 at 11:03 am
Please advise if i need to worry. Someone from the Phils called our HR here in DUbai, where I am currently working, and told that they have filed a civil case against me because of not telling to the bank that I left the Philippines. Thanks
LLL
21 Nov 11 at 2:58 pm
For all of you who see this and would like to post questions, please visit the blog of Mr. BANKER
http://www.failuretopaycreditcard.blogspot.com/
because he is the person I have to thank for this post. Banker has ALL the answers to your questions on his blog.
I am merely one of the people he has helped.
http://www.failuretopaycreditcard.blogspot.com/
the accidental geek
22 Nov 11 at 8:07 am
And for the record, I am now CC-Free and CCC-free as well.
the accidental geek
22 Nov 11 at 8:09 am
I also a person who has outstanding account with the following card. BPI and Metrobank account I tried paying them little by little. Asking discount from them so i can settle the account once and for all to no avail. Why like that you want to pay them and they don’t want to give a discount so i can close said account. Metrobank and BPI i know you want to earn but you must also understand that you are just human and we sometimes met problems once in our life.
jun
28 Dec 11 at 6:39 pm
hello,
i am also a cc defaulter, i want to pay my outstanding balance but i do not want to deal with collectors. how did you manage to be ccc-free? thank you
bob
5 Jan 12 at 2:02 pm
hi, my CC acct with HSBC was forwarded to a collection agency 4 yrs ago and until now iam not able to settle the bills. My current employer’s payroll is with them. im still on my training ang im worrying if i will have problems with it. do you know if HSBC will let me have a savings account (payroll)? im also worried since the company i work with now is a financial account (Barclays UK). please help me.. thank you.
kat
24 Jan 12 at 6:09 am
Help, how can I apply for a credit card amnesty? And by applying for it would be a reason for non-approval of car loan from a car dealers (in-house loan). Thanks.
Dada
3 Feb 12 at 2:29 pm
To all who have commented thus far, thank you very much for sharing your experiences.
However for full and reliable answers to your questions, please consult with Mr. Banker at this link:
http://failuretopaycreditcard.blogspot.com/
the accidental geek
17 Feb 12 at 4:17 pm
I would be most willing to help.
thanks AG
banker
19 Feb 12 at 9:29 am
hi sir ag,
i find your post very informative. i too suffer with these cc issues. well, there’s no one else to blame but me.
i refuse to answer their calls and mails for it brings my morale to ground. i had my mind set on acquiring funds first before talking to them. i’d like to know your view here, or am i just taking things too long that it looks like i am running away from my obligations.
thanks in advance.
enn
16 Mar 12 at 3:48 pm
i am now starting to save money for me to be able to pay my credit card debt but how can I settle my debt if the debt collector who’s calling me was not talking to me in a nice way? i want to negotiate with them since i dont have much money to pay all my cc bills, but the collectors were not talking to me nicely..
j@n3b
16 Mar 12 at 5:27 pm