Nonpayment of Services: How to File a Small Claims Case in the Philippines

Small claims is the fastest, least-formal way to sue for an unpaid bill for services (e.g., professional fees, freelance work, repairs, tuition, consulting)—without needing a lawyer. This guide walks you through when to use small claims, where to file, the forms, fees, timelines, hearing, judgment, and collection—plus practical templates and checklists you can put to work immediately.

Snapshot

Court: First Level Courts (Metropolitan/Municipal Trial Courts)

Nature: Civil action for sum of money (collection for nonpayment of services, loans, rentals, etc.)

No lawyers as counsel: Parties generally appear personally (or via authorized representative for entities).

Speed: Single, face-to-face hearing; judgment is final, executory, and unappealable (subject only to extraordinary remedies).

Jurisdictional limit: A monetary cap set by the Supreme Court in the Rules of Procedure for Small Claims Cases (A.M. No. 08-8-7-SC, as amended). The cap has been adjusted over the years—verify the current peso limit when you file. As a rule of thumb, the principal claim determines jurisdiction, exclusive of interest, damages, attorney’s fees, and costs.

1) Is Small Claims the Right Remedy?

Use small claims when all the following are true:

Your claim is purely for a sum of money arising from:
- Unpaid professional or freelance services;
- Loans or forbearance of money;
- Rentals, damaged personal property, or other simple monetary obligations.
Your total principal claim (excluding interest, penalties, damages, attorney’s fees, and litigation costs) does not exceed the current small-claims cap.

The cap is set by the Supreme Court and may change. Always check the latest amendment to A.M. No. 08-8-7-SC at filing time.
You want speed and finality (no appeal), are comfortable without formal discovery or complex procedures, and can present your own evidence succinctly.
No claim for injunction/specific performance or other non-monetary relief is needed.
Prescription has not run (see §2.5 below).

Common examples that fit

Client refuses to pay your design/consulting/instruction/repair fees already invoiced.
Event organizer fails to pay your performer/photographer’s fee.
Unpaid tutoring/professional services with a signed service agreement or clear message trail establishing terms and acceptance.

When small claims may not fit

You need non-monetary remedies (e.g., to compel performance).
Complex factual issues requiring extensive discovery, expert testimony, or multiple parties beyond what a one-day hearing can realistically handle.
Your principal claim exceeds the cap (file a regular civil action instead).

2) Before You File

2.1 Demand Letter (strongly recommended)

Send a clear written demand stating:

Parties, service rendered, amount due (principal only and a separate line for interest/penalties if any),
Due date and basis (contract/invoice/accepted quotation/chat or email confirmation),
Deadline to pay (e.g., 5–10 calendar days from receipt),
Bank/payment details,
Notice that you will file a small claims case if unpaid.

Keep proof of sending and receipt (registered mail/return card, courier, or email with read receipt). Bring these to court.

Sample demand paragraph:

“This is to formally demand payment of ₱____ for [describe services] rendered on [date(s)], per [contract/quotation/invoice] payable on [due date]. Despite completion and our previous reminders, the amount remains unpaid. Kindly settle within 7 calendar days from receipt of this letter. Otherwise, we shall initiate a small claims case without further notice.”

2.2 Barangay Conciliation (check if required)

If both parties are natural persons who reside in the same city/municipality, many disputes require Katarungang Pambarangay conciliation before going to court. Generally not required if:

Any party is a juridical person (e.g., corporation, partnership, sole proprietorship filing as a business),
Parties live in different cities/municipalities (subject to KP rules and exemptions),
The dispute falls under other statutory exemptions (e.g., government party, serious offenses, etc.). When required but skipped, the case is dismissible for failure to comply with a condition precedent. Ask your barangay if in doubt and keep the Certificate to File Action.

2.3 Evidence Checklist

Contract/engagement letter/approved quotation or message/email thread showing acceptance
Invoices, time sheets, work outputs, delivery receipts, screenshots
Demand letter and proof of receipt
Proof of partial payments (if any)
Government ID (for party/authorized representative)
For businesses: Certificate of Registration (DTI/SEC), proof of authority (Board/Partners’ Resolution; SPA for reps)

2.4 Compute the Claim

Principal (only) must be ≤ small-claims cap to stay in small claims.
Interest/penalties/fees may still be awarded if proven by contract or law, but they do not count toward the jurisdictional cap.
Attach a simple computation sheet (principal, agreed interest/late charges, dates).

2.5 Prescription (time limits)

Typical civil periods (Civil Code):

Written contracts: 10 years
Oral contracts: 6 years
Quasi-delict/unjust enrichment: 4 years File before the period lapses; prescription is measured from when your claim accrued (e.g., due date or formal demand, depending on terms).

3) Where to File (Venue) & Who May File

3.1 Venue

File in the First Level Court (MeTC/MTC/MTCC/MCTC) that has jurisdiction over your area or the defendant’s area. The small-claims rules specify venue options (commonly: where plaintiff or defendant resides or where the cause of action arose). Choose the most practical venue supported by your documents.

3.2 Parties and Representation

Individuals must appear personally at the hearing (no lawyers as counsel).
Sole proprietors, partnerships, corporations may appear through an authorized representative with a Board/Partners’ Resolution or SPA.
Lawyers cannot appear as counsel (though a lawyer-party may represent himself/herself as a party).

4) Forms and How to Fill Them

The Supreme Court publishes standard small-claims forms you must use. Expect the clerk to give you or point you to the latest set. Core filings include:

Statement of Claim (Form)
- Parties’ details, addresses, contact info (email/phone—important for notices)
- Nature and amount of claim (principal only)
- Brief Statement of Facts (chronology: how you were engaged, work done, billing, due date, demand, nonpayment)
- Reliefs sought (principal, interest, penalties, attorney’s fees if contract provides, costs)
Verification and Certification of Non-Forum Shopping (part of the form or attached)
Supporting Evidence (attach copies; bring originals to the hearing)
- Contract/quotation/invoice, work proofs, demand letter, receipts, ID, authority to represent
Information for the Clerk of Court (often included)
- For service of summons and scheduling
Proof of Indigency (if applicable)
- Motion/Certification to Litigate as Indigent + documentary proof (e.g., income documents, barangay certification) to request waiver of filing fees.

Tip: Keep your facts section under 1–2 pages. Use a bullet-point timeline and reference Exhibits “A,” “B,” “C,” … for each document.

5) Filing Fees and Indigency

Filing and other legal fees follow the Rule on Legal Fees.
Indigent litigants may seek fee exemption upon court approval (attach proof).
If you prevail, reasonable costs and contractual attorney’s fees (if stipulated) may be awarded.

6) What Happens After Filing

Docketing & Summons The court issues summons and notifies the defendant, usually with a copy of your claim and attachments.
Response The defendant files a Response (on the prescribed form) within the period indicated in the summons (commonly 10 calendar days from receipt). The Response should attach supporting documents and state defenses and counterclaims (if any, and within the cap).
Setting of Hearing The court sets a one-day, face-to-face hearing. Parties must personally appear (or via authorized rep for entities). Non-appearance can lead to judgment based on available evidence.

7) The Small Claims Hearing

Informality & Speed: The judge actively asks questions. Rules of evidence are relaxed. Bring originals and 3 sets of copies (court + opposing party + you).
Prohibited pleadings typically include: motion to dismiss (except for lack of jurisdiction/venue and other limited grounds defined by the rules), motion for new trial, motion for reconsideration, petition for relief, bill of particulars, and most dilatory motions.
No default judgment in the technical sense, but if the defendant fails to appear or fails to file a Response, the court may proceed and render judgment based on your evidence.
Settlement first: Many courts attempt amicable settlement at the start. If you settle, the court issues a judgment upon compromise, enforceable like any other judgment.
One-day trial: Present your facts succinctly. Use a short script:
1. engagement and terms, 2) work performed, 3) billing/due date, 4) demand, 5) nonpayment, 6) amount due (principal, plus interest/fees if any).

8) Judgment, Interest, and Finality

The court typically renders a written decision quickly (often the same day or shortly after the hearing).
Legal interest: In money judgments, 6% per annum legal interest has generally applied to monetary awards, subject to the Nacar doctrine and whether contractual interest governs for the pre-judgment period. Courts may:
- Award contractual interest (if validly agreed) up to the date of filing or due date per contract; and
- Impose 6% per annum from the date of judicial demand or judgment (depending on circumstances) until full satisfaction.
Final and unappealable: Small-claims judgments are final, executory, and not subject to appeal under the small-claims rules.
- Only extraordinary remedies (e.g., a Rule 65 petition alleging grave abuse of discretion) may be available in exceptional cases; these do not stay execution unless a higher court says so.

9) Enforcing (Collecting) Your Judgment

If the losing party does not voluntarily pay:

Motion for Execution File once the decision is final/executory (small-claims judgments are typically immediately executory; courts often issue a writ upon motion).
Writ of Execution The sheriff may:
- Garnish bank accounts/receivables (serve the writ and garnishment on banks or debtors of the judgment debtor),
- Levy on personal/real property,
- Conduct execution sales.
Post-Judgment Discovery Ask for examination of the judgment debtor to disclose assets, employers, banks, and receivables.
Compromise on Installments You can agree—in writing, filed in court—to installments or a discounted lump-sum in exchange for Satisfaction of Judgment.

10) Special Situations

10.1 Multiple Defendants / Counterclaims

You can sue multiple defendants if the claim arises from the same transaction.
Defendants may file permissible counterclaims within the monetary cap (arising from the same transaction). Third-party complaints are generally not allowed.

10.2 Service-Only Engagements Without a Signed Contract

Courts accept credible documentary substitutes: approved email/DM quotation, text confirming rate and scope, invoice + acceptance, delivery of outputs with no objection, and subsequent demand + silence.

10.3 Tax Withholding or Deductions

If the debtor claims withholding tax deduction (e.g., 2%/5%), they must show BIR Form 2307 actually issued to you. Absent proof, courts often award the gross unpaid fee.

10.4 Foreign or Out-of-Town Debtors

Venue and service can be trickier. Use the venue where your claim arose if allowed, and request substituted service if personal service fails, following the court’s directions.

11) Practical Checklists

11.1 Filing Packet

Statement of Claim (filled out, signed, notarized if required)
Verification & Certification of Non-Forum Shopping
ID of party/authorized representative; Board/Partners’ Resolution or SPA (if entity/rep)
Exhibits: contract/quotation, invoices, outputs, delivery/acceptance, demand letter + proof of receipt, receipts/proof of partial payment
Computation sheet (principal, interest/penalties)
Barangay Certificate to File Action (if required)
Proof for indigency (if seeking fee waiver)
Multiple photocopy sets (court/defendant/you)

11.2 Hearing Day

Originals of all exhibits + 2–3 photocopy sets
Simple talking points (2–3 minutes)
Attendance (personal or authorized rep)
Calculator/pen for quick recomputations
Phone/email on to receive last-minute notices

12) Strategy Tips

Keep it within the cap: If adding interest or penalties pushes the principal over the cap, consider waiving the excess to stay in small claims; state the waiver expressly in your claim.
Tell a clean story: Courts appreciate a short timeline with labeled exhibits; avoid long narratives.
Anchor interest to documents: If your contract states late payment interest or penalties, quote the clause and show how you computed the amounts.
Anticipate defenses: Common defenses are (a) alleged defects in work, (b) no approval of fees, (c) partial payment, (d) wrong venue, (e) prescription. Prepare brief rebuttals with documents.
Settlement math: A realistic discounted settlement today can beat slow or uncertain collection later. Put any settlement on record so it’s enforceable.

13) Quick FAQs

Q: Do I need a lawyer? A: No. Parties typically cannot be represented by counsel in small claims (except when a lawyer is appearing as a party).

Q: Can I appeal if I lose? A: No appeal. Judgment is final and executory. Only extraordinary relief in exceptional cases.

Q: How fast is this? A: Designed for a single hearing with quick judgment, subject to each court’s calendar and proper service on the defendant.

Q: What interest rate applies if my contract is silent? A: Courts generally apply 6% per annum on money judgments, with accrual rules depending on whether the amount was established at demand or only upon judgment.

Q: Is barangay conciliation always required? A: Not if any party is a juridical person or the parties reside in different cities/municipalities (and in other KP-law exemptions). When required, get the Certificate to File Action.

14) Final Reminders

The jurisdictional peso cap and some procedural details are set by Supreme Court administrative circulars and have been updated over time. Confirm the current cap and latest forms at the clerk of court before filing.
Bring government-issued ID, originals of exhibits, and extra copies.
Keep your presentation short, document-backed, and courteous. The small-claims system rewards clarity and preparation.

Mini-Template: Statement of Facts (for your form)

On [date], Defendant engaged me to provide [describe service] at a fee of ₱[amount], as shown by Exhibit “A” [contract/quote/email].

I performed the agreed services on [dates] and delivered the outputs, as shown by Exhibit “B” [invoice/output/delivery].

Payment became due on [due date] but remains unpaid despite reminders, as shown by Exhibits “C–D.”

On [date], I sent a Demand Letter received by Defendant on [date], as shown by Exhibit “E.”

Defendant failed and refused to pay without valid reason. RELIEF: Order Defendant to pay ₱[principal], plus [contractual interest/penalties if any], 6% legal interest as allowed, and costs.

Armed with the right documents and a focused presentation, small claims can convert an unpaid invoice into an enforceable judgment—quickly and without the expense of full-blown litigation.