Filing Small Claims for Unpaid Debts in the Philippines

A practitioner‑oriented guide based on the 2020 Revised Rules of Procedure for Small Claims Cases (RPSCC) as last amended by A.M. No. 08‑8‑7‑SC [April 11 2022]

Quick take‑aways

Ceiling: ≤ ₱400,000 (exclusive of interest and costs).

Court: 1st‑level trial courts (MeTC/MTC/MCTC) where the plaintiff or defendant resides / does business.

Lawyers: Not allowed to appear for parties (except if the lawyer is the party).

Speed: One‑day hearing; decision within 24 hours; no appeal.

Forms‑driven: You fill out Supreme Court‑supplied templates; the clerk dockets the case on the same day.

1. What Counts as a “Small Claim”

Covered	NOT Covered
Purely monetary claims arising ex contractu – e.g., unpaid loans, credit‑card or utility bills, rent, tuition, professional fees, checks/BP 22, delivery invoices, promissory notes.	Actions for damages, foreclosure, ejectment, partition, ownership, or in rem proceedings.
Government fees/dues recoupable under law (e.g., overpaid SSS contributions)	Claims ex delicto (torts), quasi‑delicts, or moral/exemplary damages.

The total principal claim must not exceed ₱400,000. Interest, penalties, and filing costs are computed on top of – and independently from – the jurisdictional ceiling.

2. Legal Framework

Source	Key Points
A.M. No. 08‑8‑7‑SC, as amended	Lays down the RPSCC (latest amendments effective 11 April 2022, raising the ceiling from ₱300 k to ₱400 k).
Section 5(2), Art. VIII, Constitution	Empowers the Supreme Court to promulgate rules.
B.P. 129, as amended	Gives first‑level courts exclusive original jurisdiction over small claims.
Katarungang Pambarangay Law (R.A. 7160, ch. VII)	Requires barangay conciliation for intra‑barangay disputes unless exempt.

3. Preconditions Before You File

Demand Letter
- Not required by rule, but indispensable evidence of default and proof of accrual of interest/penalties.
Barangay Conciliation (Lupon tagapamayapa)
- Mandatory if both parties are natural persons residing in the same city/municipality and within each other’s barangay.
- Exemptions:
  - Corporations/partnerships as any party.
  - Parties reside in different municipalities or where venue is stipulated in writing.
  - Urgent legal actions (prescription/ perishable goods).
- Secure a Katarungang Pambarangay Certification (Settlement / No Settlement / Repudiation).

4. Choosing the Right Venue

File in the court that has territorial jurisdiction over either:

Plaintiff’s residence or principal place of business; or
Defendant’s residence/principal place of business, at the plaintiff’s option.

Tip: Suing near you eases service and attendance, but filing where the defendant is makes execution smoother.

5. Paperwork Checklist

Document	Remarks	Copies
Verified Statement of Claim (Form 1‑SCC)	Factual narrative + causes of action; checklists for evidence.	Original + 2
Certification of Non‑Forum Shopping	Pre‑printed part of Form 1‑SCC.	—
Documentary evidence	Loan contract, demand letter, receipts, checks, disconnection notice, etc.	Photocopy + originals for comparison
Witness affidavits (Form 4‑SCC)	Optional; must be based on personal knowledge.	—
Barangay certificate	If applicable.	—
Authorization letter/SPA	Only if a non‑lawyer representative appears.	—

You need not notarize anything; the forms are under oath by signing before the court clerk.

6. Filing Fees (2025 schedule*)

Amount claimed	Docket Fee**	Summons & other fees
≤ ₱20 k	₱2,500	Add ₱150 Legal Research, ₱50 Mediation, ₱500 Sheriff’s fee (for possible execution)
₱20 k – ₱100 k	₱3,000 + 1% of excess over 20 k	Same
₱100 k – ₱200 k	₱4,000 + 0.75% of excess over 100 k	Same
₱200 k – ₱400 k	₱4,750 + 0.5% of excess over 200 k	Same

* Latest circular: OCA Circular No. 178‑2023. ** Indigent litigants (gross income < ₱10 k/mo or AFP personnel below E‑1) may litigate in forma pauperis.

7. Step‑by‑Step Procedure

Docketing (Day 0)
- File the papers; clerk assigns SC‑SC‑XX‑XXXX docket number, assesses fees, and issues summons the same day.
Service of Summons (within 5 calendar days)
- Personal or substituted service by sheriff/process server.
- Defendant’s Verified Response (Form 3‑SCC) due 10 days from receipt.
Hearing (within 30 days from filing)
- One‑day “bench mediation”; judge actively settles first.
- If compromise fails, trial proceeds immediately: summary presentation of evidence, cross‑questioning by judge, clarificatory questions only.
Decision (within 24 hours from termination)
- Written judgment delivered in open court; a copy is furnished the same day.
Finality & Execution
- Decision is final, executory, and unappealable.
- Motion to vacate allowed only on fraud, coercion, or clear clerical error, filed within 5 days; the ruling on the motion is likewise final.
- After 5 days, apply for writ of execution; sheriff levies property or garnishes bank accounts.

8. Post‑Judgment Scenarios

Situation	Remedy
Judgment debtor refuses to pay	Sheriff execution: levy personal/real property, wage garnishment, bank garnishment (Rule 57).
Debtor absent/unlocated	Alias writ valid for 5 years, renewable; consider Rule 72 proceedings (settlement of estate) if deceased.
Debtor claims inability to pay	Court may order examination of debtor (Rule 39 §36).
Fraudulent transfers	File separate action to annul conveyance (still within ₱400 k? consider regular civil action).

9. Strategic Tips for Plaintiffs

Comprehensive demand package: Include computation of principal + contractual interest (or 6% p.a. legal interest if silent) up to date of filing.
Compute continuing interest in your Prayer so the court can award it until fully paid.
Attach every relevant document. The judge cannot accept new evidence after filing; no surprise witnesses.
Anticipate defenses: Payment, prescription (4 years for quasi‑contracts, 6 years for written contracts, 10 years for BP 22), lack of cause of action.
Check multiple defendants: You may sue several debtors jointly as long as aggregate claim per defendant doesn’t breach ₱400 k.

10. Common Defenses for Defendants

Payment / Partial Payment – Prove by receipts, bank records.
Prescription – Debt older than prescriptive period.
Incorrect venue – Parties reside elsewhere; move to dismiss motu proprio.
Non‑compliance with barangay conciliation – Move to dismiss before filing response; failure cures if case dismissed.
Defective demand / unconscionable penalties – Court may strike usurious interest (> 6% legal interest without stipulation; >12% pre‑July 1 2013).

11. Digital & Special Rules

eCourt / JEFIS: In Metro Manila, Cebu, Davao and select pilot courts, small‑claims pleadings may be filed electronically; payments via Judiciary ePayment System (JePS).
Remote appearance: A.M. No. 21‑06‑08‑SC allows videoconferencing; check your court’s guidelines.
OFWs & Overseas Plaintiffs: May execute pleadings before Philippine consular officers or notarize abroad pursuant to Apostille Convention.

12. Comparison with Other Remedies

Remedy	Ceiling	Appeal?	Lawyers?	Typical Timeline
Small Claims (RPSCC)	₱400 k	✘	✘	30‑45 days
Regular Civil Action (Rule 6)	None	✔	✔	2‑5 years
Barangay Settlement (R.A. 7160)	₱200 k (over this, barangay may still mediate)	✘	✘	15‑30 days
BP 22 Criminal Case	Any amount	✔	✔	1‑3 years; jail/fine possible

13. Frequently Asked Questions

Can I claim moral damages?
- No. Only money owed plus interest, costs, and actual agreed liquidated damages.
May a corporation sue?
- Yes, through its authorized representative (board resolution or secretary’s certificate).
Is notarization required?
- Not for the verified forms; the court acts as administering officer.
What if the defendant counter‑sues?
- Counterclaim permitted if it is also within ₱400 k and arises out of the same transaction.
Can the parties settle anytime?
- Yes; submit Compromise Agreement (Form 6‑SCC) for judgment upon compromise (executory).

14. Practical Checklist

Gather all proof: contract, invoices, ledger, demand letter, barangay certificate.
Download SC Forms 1‑7 SCC (available at sc.judiciary.gov.ph).
Prepare original + 2 sets; staple in proper order.
Compute filing fees; bring cash or pay via JePS.
File early to stop prescription and interest accrual.
Calendar hearing date (ask the clerk).
Prepare succinct oral narration (< 5 minutes).
Bring valid ID; dress in court‑appropriate attire.

15. Final Notes & Disclaimer

This article synthesizes the latest Supreme Court rules and administrative circulars up to July 27 2025. While accurate at publication, always check for new A.M. orders or OCA circulars raising the monetary ceiling or modifying procedure. This is legal information, not legal advice. For case‑specific guidance, consult a Philippine lawyer who can evaluate your documents and defenses.

Prepared by ChatGPT (OpenAI o3), Philippine jurisprudence researcher.

Filing Small Claims for Unpaid Debts in the Philippines