In the Philippines, the Small Claims Procedure was designed to provide a fast, inexpensive, and informal way for individuals to recover money owed to them without the need for a lawyer. Governed by the Revised Rules of Procedure for Small Claims Cases, this process bypasses the lengthy trials typically associated with civil litigation.

1. What Qualifies as a Small Claim?

A case is considered a "Small Claim" if it is purely for the payment or reimbursement of a sum of money.

Jurisdictional Amount

As of the latest Supreme Court administrative matters, the claim must not exceed ₱1,000,000.00 (exclusive of interests and costs) if filed in the Metropolitan Trial Courts (MeTC), Municipal Trial Courts in Cities (MTCC), Municipal Trial Courts (MTC), or Municipal Circuit Trial Courts (MCTC).

Scope of Claims

You can file a small claims case for:

Unpaid loans or debt.
Claims for liquidated damages arising from contracts.
Enforcement of a "barangay amicable settlement" or an arbitration award involving money.
Breach of contract of lease or services (unpaid rent or unpaid labor).

2. Key Prerequisites

Before heading to court, ensure you have complied with the following:

Demand Letter: You must have sent a formal demand letter to the debtor, and they must have failed to pay within the period specified.
Barangay Conciliation: If both parties reside in the same city or municipality, the case must generally go through the Katarungang Pambarangay first. You will need a Certificate to File Action if no settlement is reached.
Pro Se Representation: Lawyers are strictly prohibited from representing a party at the hearing. You must represent yourself, though you may consult a lawyer before the filing.

3. Step-by-Step Filing Process

Step 1: Prepare the Forms

You do not need to draft a complex legal pleading. Instead, you must fill out the Statement of Claim (Form 1-SCC). This is a "fill-in-the-blanks" form available at the Office of the Clerk of Court or downloadable from the Supreme Court website.

Step 2: Attach Supporting Documents

Provide "Actionable Documents" to prove the debt, such as:

Promissory notes or contracts.
Affidavits of witnesses.
Receipts or invoices.
The Demand Letter and proof of its receipt.
Certificate to File Action from the Barangay.

Step 3: File and Pay Fees

File the Statement of Claim (in triplicate) with the court that has jurisdiction over your or the defendant’s place of residence. You must pay the legal fees, unless you qualify as an "indigent litigant."

Step 4: Issuance of Summons

If the court finds the claim sufficient, it will issue a Summons to the defendant and a Notice of Hearing to both parties. This usually happens within 24 hours of filing.

4. The Defendant’s Response

The defendant has ten (10) days from receipt of the summons to file a Verified Response (Form 3-SCC).

If the defendant fails to file a response, the court may render judgment based on the facts alleged in the Statement of Claim.
If the defendant has a claim against the plaintiff (Counterclaim), it must be filed at this stage.

5. The Hearing and Mediation

The hearing is informal and conducted by a single judge.

Judicial Dispute Resolution (JDR): On the day of the hearing, the judge will first attempt to help both parties reach an amicable settlement.
The Hearing: If mediation fails, the judge will proceed with the hearing in an informal manner. You will explain your case, and the defendant will explain theirs.
The Decision: The judge is required to issue a Decision within twenty-four (24) hours after the hearing ends.

6. Finality of Judgment

The decision in a Small Claims case is final, executory, and unappealable.

Note: Since you cannot appeal the decision, the only remaining legal remedy if a party believes the judge acted with grave abuse of discretion is a Petition for Certiorari under Rule 65, though this is a high legal threshold to meet.

7. Execution of Judgment

If you win and the defendant still refuses to pay, you must file a Motion for Execution. The court will then issue a Writ of Execution, authorizing a sheriff to garnish the defendant's bank accounts or levy their properties to satisfy the debt.