A practical legal guide in Philippine context (from demand letter to enforcement).

1) What “Small Claims” Is (and Why It Exists)

A small claims case is a simplified court action designed to help people and small businesses recover money without the expense and delay of a full-blown civil case. It is handled under special Supreme Court rules that:

use simple forms instead of long pleadings,
require personal appearance of parties (with limited exceptions),
discourage technical motions and long litigation, and
aim for a fast judgment—often in one hearing date.

Small claims is not a “less serious” case—it’s a real court judgment that can be enforced by execution (garnishment, levy, etc.) if the losing party does not pay.

Important: The Supreme Court periodically amends the small claims rules (including the maximum claim amount and some procedures). Always confirm the current threshold and forms with the court (Office of the Clerk of Court) or the Supreme Court’s latest circulars/issuances before filing.

2) Who Can File (and Against Whom)

Who may file as plaintiff

Individuals (including OFWs; you can authorize a representative in limited situations)
Sole proprietors
Partnerships and corporations (through an authorized representative)

Who may be sued as defendant

Individuals
Businesses (sole props, partnerships, corporations)
Organizations that can be sued under Philippine law

3) What Claims Qualify

Small claims generally covers money claims—meaning you are asking the court to order the defendant to pay a sum of money.

Common examples:

Unpaid loans (personal loan, promissory note, IOU)
Unpaid goods sold / delivery receipts / sales invoices
Unpaid services rendered (contractor, repairs, professional services—if the claim is purely for money)
Unpaid rent and utilities (money aspect)
Refunds (when based on contract/obligation and the relief sought is money)
Damages that are capable of simple computation and tied to a money obligation (often still based on contract)

Typical claims that do not belong in small claims

Small claims is not for cases requiring extensive evidence, complex reliefs, or special proceedings. Commonly excluded (or not suitable):

Criminal cases
Annulment, legal separation, custody
Probate/estate settlement
Ejectment (unlawful detainer/forcible entry) as a main case (though money claims related to rent may appear in ejectment cases, not small claims)
Claims asking for non-monetary relief (specific performance beyond paying money, rescission with complicated issues, injunction, etc.)
Cases requiring detailed accounting or expert-heavy disputes

4) The Most Important Gatekeepers Before You File

A. Check the amount

Small claims has a cap on the amount you can sue for. This cap has been increased in past amendments, so confirm the current ceiling with the court. If your claim exceeds the ceiling, you may need a regular civil case—or you may choose to waive the excess to fit within the small claims limit (if allowed under current rules and consistent with your goals).

B. Check venue (where to file)

As a rule in civil cases, file where:

the defendant resides (if individual), or
the defendant’s principal office is located (if business), or
where the transaction/obligation happened (depending on the rule and facts)

Because venue rules can vary in application, the safest practical step is: ask the Clerk of Court which branch/court has venue for your defendant and your claim.

C. Check barangay conciliation (Katarungang Pambarangay)

Many disputes between individuals who live in the same city/municipality may require barangay conciliation first, and you may need a Certificate to File Action (or proof of failed settlement).

Common exceptions (often):

When parties live in different cities/municipalities
When one party is a juridical entity (company) in many situations
When urgent legal action is needed, or other statutory exceptions apply

Barangay rules are technical. If it might apply to you, settle it early—courts can dismiss cases filed without required barangay processing.

D. Prescription (deadline)

Your right to sue can expire. Typical prescriptive periods depend on the cause:

written contracts often have longer periods than oral contracts,
some obligations prescribe sooner,
special laws may apply.

If you are close to a deadline, move quickly.

5) Lawyers: Are They Allowed?

Small claims is designed to be do-it-yourself. In general:

Lawyers are not allowed to appear for parties in the hearing.
Parties usually must personally appear.

However, the rules commonly allow limited representation, such as:

A party may authorize a representative/attorney-in-fact in certain situations (often requiring a Special Power of Attorney and sometimes a valid reason for non-appearance).
Corporations/partnerships typically appear through an authorized representative with proof of authority (e.g., Secretary’s Certificate / Board Resolution).

Even if your lawyer cannot “appear,” you may still consult one behind the scenes to help you prepare.

6) What You Need to Prepare (Documents and Evidence)

Think of small claims as: “Prove the debt, prove demand, prove non-payment.”

Core documents (as applicable)

Proof of obligation
- promissory note, loan agreement, IOU
- invoices, delivery receipts, purchase orders
- contract for services, job order
- acknowledgment receipts
- chat messages/emails confirming debt (print + authenticate)
Proof of payment history
- bank transfer slips, GCash/PayMaya records, deposit slips
Proof of demand
- demand letter with proof of receipt (registered mail, courier, email with reliable proof, personal service with receiving copy)
Computation
- principal, agreed interest (if any), penalties (if lawful), less payments
Identification
- valid ID(s)
Authority documents (if filing for a business or using a representative)
- DTI/SEC documents, Secretary’s Certificate/Board Resolution, SPA

Practical tip on evidence

Make 3 sets (or what the court requires): 1 set for the court, 1 for the defendant, 1 for you.

Bring originals for comparison.

7) Step-by-Step: How to File a Small Claims Case

Step 1: Make a clear written demand (highly recommended)

A demand letter is not always strictly required for every claim, but it is strongly advised because it proves:

you asked for payment,
the defendant refused/ignored, and
your claim is ripe for court.

Include:

facts of the debt,
amount due and computation,
deadline to pay,
where/how to pay,
notice that you will file a small claims case if unpaid.

Step 2: Get the correct small claims forms

Small claims uses standard forms (Statement of Claim, Response, etc.). Obtain them from:

the Office of the Clerk of Court of the proper trial court, or
official court channels when available.

Step 3: Fill out the Statement of Claim

You’ll typically provide:

names/addresses/contact details of parties
facts of the claim (short narrative)
amount claimed (principal + allowable add-ons)
interest/penalty basis (contract or law)
list of attached evidence
certification/verification portions (often sworn)

Be precise. Judges like clear timelines:

When the loan was made / goods delivered / service completed
When payment was due
When demand was made
What payments were made (if any)

Step 4: Prepare annexes and notarization (if required)

Many small claims forms require a sworn statement or verification. Courts may require notarization for certain parts. Ask the Clerk of Court what must be notarized in your locality.

Step 5: File at the proper court and pay filing fees

File your completed forms and annexes at the correct first-level court (typically the Metropolitan Trial Court / Municipal Trial Court / Municipal Circuit Trial Court, depending on location).

Pay:

filing fees (varies by amount and court)
summons/service fees (if applicable)

If you cannot afford fees, ask about applying as a litigant exempt from payment (subject to rules and proof).

Step 6: Wait for summons and hearing date

The court will:

review if your case is proper for small claims,
issue summons to the defendant, and
set a hearing date (often relatively soon).

Step 7: Defendant files a Response

The defendant is usually required to submit a response form (not a long “Answer”) with:

admissions/denials,
defenses,
attachments/evidence,
any counterclaim allowed under small claims rules.

Step 8: Appear on the hearing date (bring everything)

At hearing, the judge typically:

confirms appearances and authority documents,
explores settlement/compromise,
clarifies facts through questions,
may receive brief statements and check documents.

Small claims hearings are usually fast and direct.

Step 9: Settlement or judgment

If you settle, the court records a compromise agreement which becomes enforceable like a judgment.
If no settlement, the court proceeds toward a decision.

Small claims decisions are generally intended to be issued quickly under the rules.

8) What If Someone Doesn’t Appear?

Consequences vary depending on who is absent:

If plaintiff fails to appear: the case may be dismissed (often without prejudice, meaning you may refile, subject to rules and prescription).
If defendant fails to appear: the court may proceed and decide based on plaintiff’s evidence and may render judgment.

Courts take small claims attendance seriously because it’s designed for speedy resolution.

9) What You Can Recover (and What You Usually Can’t)

Usually recoverable:

Principal amount owed
Interest if:
- expressly agreed in writing (and lawful), or
- allowed by law as legal interest when applicable
Certain costs/fees as allowed by the rules and assessed by the court

Usually not recoverable (or difficult in small claims):

Large claims for moral/exemplary damages requiring extensive proof
Attorney’s fees as a major component (small claims discourages lawyer-driven litigation)
Non-monetary relief (injunction, specific performance beyond payment, etc.)

10) After You Win: How to Enforce the Judgment (Execution)

Winning is one thing—collecting is another.

If the defendant does not pay voluntarily, you may apply for writ of execution. Enforcement can include:

Garnishment of bank accounts (if you can identify the bank/branch)
Garnishment of wages (subject to legal limits and procedures)
Levy on personal property (vehicles, equipment) or real property (land)
Sheriff’s sale of levied property to satisfy the judgment

Practical enforcement tips:

Gather information early: employer, bank, assets, business location.
Keep receipts and copies of all court orders and sheriff’s returns.
Be ready for partial satisfaction and installments if the court allows it.

11) Common Defenses You Should Anticipate

Defendants often argue:

“I already paid” (ask for receipts/proof)
“That wasn’t a loan; it was a gift/investment”
“The goods were defective / service was incomplete”
“The interest/penalty is unconscionable”
“Wrong person / identity issue”
“Barangay conciliation was required”
“Prescription has set in”
“Wrong venue / wrong court”

Prepare concise rebuttals and documents.

12) Practical Checklist (Bring This to Court)

Correct court/venue confirmed
Claim amount within current small claims ceiling (or waiver plan)
Barangay conciliation compliance or valid exception
Filled-out Statement of Claim (and other forms)
Evidence labeled and organized (contracts, receipts, chat prints, invoices)
Demand letter + proof of receipt
Computation sheet (principal/interest/payments)
IDs (and authority documents if representative/business)
Copies for court and defendant
Filing fees budget (or indigency application)

13) A Simple Computation Model (Example)

If the defendant borrowed ₱50,000 due on June 1 and paid ₱10,000 later:

Principal: ₱50,000
Less payment: ₱10,000
Balance: ₱40,000
Add interest (only if validly agreed or legally allowed): computed from due date or demand date, depending on basis
Add allowable costs/fees: as assessed by the court

Keep it clean and defensible. If you claim interest/penalty, be ready to show where it comes from.

14) Frequently Asked Questions

Can I file small claims for “utang” proven only by chat messages?

Often yes—if you can authenticate the messages and they clearly show the obligation and amount. Print them, include context, and bring the phone/device if needed.

Can I sue a corporation in small claims?

Yes, if the claim is qualified and within the threshold. Serve summons to the proper office and ensure correct corporate details.

Can I claim interest even if we never agreed on it?

If there’s no valid agreement, interest may still be awarded in some situations as legal interest, but courts are cautious. Don’t assume; base your claim on clear grounds.

Can the defendant file a counterclaim?

Small claims rules typically allow limited counterclaims (often those connected to the same transaction), but the allowance and limits depend on the current small claims rules. Be prepared for it.

Is the decision appealable?

Small claims is designed to be final and speedy. Remedies are generally limited; serious procedural errors may be raised through special remedies under court rules, but not like a regular appeal.

15) Draft Demand Letter (Basic Template)

DEMAND LETTER Date: ________

To: [Name of Debtor] Address: __________

Re: Demand for Payment of ₱________

Dear [Name], On [date], you borrowed / became obligated to pay me ₱_______ as evidenced by [promissory note / messages / invoice no. ]. The amount became due on [date]. Despite my requests, you have not fully paid. As of today, your outstanding balance is ₱_ (see attached computation).

I demand that you pay the amount of ₱_____ on or before [date, give a reasonable deadline]. Payment may be made via [method]. If you fail to pay within the stated period, I will file the appropriate Small Claims action in court to recover the amount, plus allowable costs.

Sincerely, [Your Name] [Contact details]

16) Final Notes to Avoid Costly Mistakes

Wrong venue and barangay non-compliance are among the most common reasons cases get dismissed.
Small claims rewards organization: timeline, documents, computation.
Be settlement-ready. A fair compromise can be faster and more certain than execution.

If you want, provide the key facts (what happened, dates, amount, where you and the other party live/are located, and what documents you have), and a clean timeline + evidence checklist can be drafted to match your situation.