The obvious answer is NO, you don’t need lawyers BUT they are certainly HELPFUL. Squeezing out money from your borrowers can be taxing and what can one really do when the borrower tells you “I do not have funds right now”?

Hiring a lawyer to collect your debt can certainly take that burden off. While it is not advisable to file cases in court, there are times when that is the only option left. Then you’ll need lawyers.

So what can a lawyer do for you? Initially, they will send a demand letter to your borrower, stating the amount owed and indicating the penalties and interests if there are any. The letter should clearly state the “demand to pay” and the period within which payment should be made. If unheeded, the lawyer is given the right to file a court case.

Once a court case is filed, the judge will ask the parties to come up with a reasonable settlement of the debt. If the debt is denied, a full blown trial may be expected as matters of evidence will now be considered. If, on the other hand, the debt is admitted, all you need to discuss is the mode of payment.

Modes of payment can vary from installment basis, dacion en pago, and novation. These modes will be discussed in detail in my next article. When the parties agree to a mode of payment, a settlement agreement is signed. If borrower still fails to pay despite the agreement, the lender will simply have to go to court and ask the judge to enforce the signed agreement.

Finally, a lawyer is also not needed when filing “small claims”. Debts which are less than 100,000 Pesos are considered small claims. The lender may go directly to court without the need of legal representation. He or she just have to fill out a ready form and then pay the filing fees.

Should you need more information on debt collection in the Philippines, feel free to contact us at +639175488045 or send an email at

See also:  Writing a Demand Letter to Collect Debts in the Philippines