Quick answer

In the Philippines, a creditor generally has 10 years to file a court action based on a written loan agreement or promissory note. The period is counted from the date the creditor’s right to sue arises—usually the note’s maturity date, the due date of an unpaid installment, or the date the entire balance validly becomes due under an acceleration clause.

Different periods may apply:

Basis of the claim	General prescriptive period
Written contract or promissory note	10 years
Oral contract	6 years
Mortgage foreclosure action	10 years
Final judgment	10 years, subject to the separate rules on execution
Other action without a period fixed by law	5 years

These periods come principally from Articles 1142, 1144, 1145, and 1149 of the Civil Code of the Philippines.

The calculation is not always as simple as adding 10 years to the date the money was borrowed. The due date, demand requirement, installment schedule, acceleration clause, payments, written demands, written acknowledgments, prior cases, and barangay proceedings can change the result.

The 10-year rule for a promissory note

Article 1144 of the Civil Code requires an action upon a written contract to be brought within 10 years from the time the right of action accrues. A signed promissory note ordinarily falls within this rule.

The Supreme Court has repeatedly applied the 10-year period to actions on promissory notes. In a 2024 ruling, it likewise held that an action upon a promissory note and an action to foreclose its mortgage security generally prescribe in 10 years from accrual: Premiere Development Bank v. Central Surety & Insurance Company, Inc., G.R. No. 201881, July 15, 2024.

A document is not automatically a “written contract” merely because some evidence of the transaction is written. The document must sufficiently embody the agreement or obligation being enforced. Receipts, checks, text messages, account statements, and deposit records may prove a loan, but whether they constitute the written contract itself depends on their contents and the surrounding documents.

If the loan was purely oral, Article 1145 generally gives the creditor six years. A creditor should not assume that a later unilateral statement of account converts an oral loan into a written contract.

When does the period begin?

Under Article 1150 of the Civil Code, prescription is ordinarily counted from the day the action may be brought. That is the date when the creditor has a complete cause of action—not necessarily the date the money was released.

Note with a definite maturity date

If a promissory note states that the full amount must be paid on a specific date, the right to sue normally arises when the debtor fails to pay on that date.

For example, if the entire loan matured on 30 September 2018 and no valid interruption occurred, the ordinary 10-year period would generally run from that maturity or default. Exact computation should still account for the wording of the note and the procedural rules on periods.

Payable in installments

For an installment loan, each installment generally becomes enforceable when it falls due. This may result in separate accrual dates for different installments.

The conclusion may change if the note contains an acceleration clause. Such a clause may make the entire unpaid balance due after one default:

An automatic acceleration clause may operate upon the specified default without a separate election or demand.
An optional acceleration clause ordinarily requires the creditor to exercise the option in the manner contemplated by the contract.
The clause may expressly waive demand or notice, or may itself require notice.

The Supreme Court recognizes the legal effect of valid acceleration clauses. The precise accrual date therefore depends on the clause’s wording and what the creditor actually did. See Philippine Savings Bank v. Castillo, G.R. No. 228435, June 21, 2017.

No due date or payment “upon demand”

If the agreement does not state a definite maturity date, demand may be necessary before the debtor is in delay or before an action becomes ripe. Article 1169 generally places a debtor in delay after judicial or extrajudicial demand, but recognizes exceptions, including when:

the contract or law expressly says demand is unnecessary;
time was a controlling reason for the agreement; or
demand would be useless because performance has become impossible through the debtor’s act.

A clause making the debt payable on demand does not give a creditor unlimited control over prescription. Courts examine the nature of the obligation, the language used, and whether allowing an indefinite delay would defeat the policy behind prescription.

What interrupts prescription?

Article 1155 of the Civil Code identifies three ways to interrupt prescription:

filing the action in court;
a written extrajudicial demand by the creditor; or
a written acknowledgment of the debt by the debtor.

A valid interruption generally erases the period already elapsed and causes the applicable period to run anew from the legally relevant event. The Supreme Court explained this effect in Overseas Bank of Manila v. Geraldez, G.R. No. L-46541, December 28, 1979, and applied it more recently in Philippine National Bank v. Spouses Chan, G.R. No. 212002, July 28, 2021.

Written demand by the creditor

A demand should clearly identify:

the parties;
the note or loan;
the amount claimed and how it was calculated;
the missed due date or default;
the demand for payment; and
the date and method of delivery.

Proof that the debtor received the demand is important. Keep the signed receiving copy, registry return card, courier tracking and proof of delivery, authenticated email record, or other reliable evidence.

An oral demand is not one of the forms of interruption listed in Article 1155. It may still be relevant to default or interest, but a creditor should not rely on it to interrupt prescription.

Repeated demand letters cannot safely be used to preserve a claim forever. Their legal effect depends on whether each demand was made while an enforceable action still existed and whether receipt can be proved. Once prescription has already been completed, a late demand by the creditor does not by itself revive the action.

Written acknowledgment by the debtor

A debtor’s written acknowledgment must clearly recognize a present, subsisting obligation and the creditor’s right to enforce it. An ambiguous statement, an acknowledgment that money was once received, or a message disputing the entire balance may not be enough.

The Supreme Court has emphasized that the acknowledgment must be clear, specific, and unequivocal. If prescription has already run, mere acknowledgment is generally insufficient; there must be a new and positive promise to pay capable of supporting the renewed obligation. See Premiere Development Bank, G.R. No. 201881.

A proposed payment plan, restructuring agreement, balance confirmation, or signed request for an extension may affect prescription, but its exact language matters. Debtors should not sign such documents without checking whether they acknowledge or renew a disputed or already prescribed claim.

Payments

A payment can be significant evidence of acknowledgment and may affect the reckoning date, particularly for obligations involving principal and interest. Article 1151 provides a specific rule for obligations to pay principal with interest or annuity, under which prescription runs from the last payment of the annuity or interest.

Do not assume that any unexplained transfer automatically renews every part of a disputed debt. Preserve the receipt, payment instructions, account ledger, and written communications showing which obligation and installment the payment covered.

Filing the wrong proceeding

Not every filing interrupts prescription as a court action. In the 2024 Premiere Development Bank ruling, the Supreme Court held that filing an application for extrajudicial foreclosure with the sheriff was not an action filed before a court for purposes of Article 1155. A creditor should not assume that an administrative request, collection-agency referral, or extrajudicial foreclosure application has the same effect as filing a judicial action.

Barangay conciliation and a deadline that is about to expire

Katarungang Pambarangay conciliation may be a mandatory precondition when the parties are natural persons who actually reside in the same city or municipality, subject to statutory exceptions. The proper barangay generally depends on the parties’ residences and, for certain property disputes, the property’s location.

Section 412 of the Local Government Code allows parties to go directly to court in specified situations, including when the action may otherwise be barred by the statute of limitations. Other exceptions include actions coupled with provisional remedies such as attachment or preliminary injunction.

Under Section 410(c), filing the dispute with the punong barangay interrupts the prescriptive period. The interruption does not last indefinitely: prescription resumes upon receipt of the complaint or rejection by the

Quick answer

In the Philippines, an action to collect a debt evidenced by a written contract or promissory note generally must be filed within 10 years from the date the creditor’s right to sue accrues. That date is usually the note’s maturity date or the debtor’s default—not necessarily the date the money was borrowed.

Important exceptions can change the calculation:

An action based on an oral loan agreement generally prescribes in six years.
A timely written extrajudicial demand, a court filing, or a qualifying written acknowledgment of the debt by the debtor interrupts prescription and ordinarily starts a new period.
Installment debts, acceleration clauses, demand requirements, renewals, partial payments, mortgages, and judgments require separate analysis.
Once the applicable period has fully expired, an ordinary demand letter generally cannot revive the action by itself.

The exact result depends on the note, payment history, communications, and proof of receipt of any demand or acknowledgment. Do not assume that “10 years from the loan date” is always correct.

The basic prescription periods

Under the Civil Code of the Philippines:

Basis of the claim	General period
Written contract or promissory note	10 years from accrual
Oral contract	6 years from accrual
Mortgage action	10 years from accrual
Obligation created by law	10 years from accrual
Final judgment	10 years, subject to the special rules on execution

Article 1144 gives a 10-year period for actions upon a written contract, an obligation created by law, or a judgment. Article 1145 gives six years for an action upon an oral contract. Article 1142 separately provides that a mortgage action prescribes after 10 years.

These classifications depend on the legal basis proved in court. A receipt, check, ledger, text exchange, or other writing does not automatically turn an oral loan into a “written contract.” The document must be examined to determine whether it contains or proves the parties’ contractual undertaking.

When does the period start?

Prescription ordinarily begins when the creditor first has a complete and enforceable cause of action—when the creditor could validly sue for nonpayment. Articles 1150 and 1169 of the Civil Code and the terms of the agreement are central to this determination.

Note with a fixed maturity date

If a promissory note says that the entire amount is payable on a definite date, the right to sue ordinarily accrues when the debtor fails to pay at maturity.

Example: A note payable in full on 30 June 2020 is not normally counted from the date it was signed if it matured later. Subject to interruption and contractual exceptions, prescription generally begins when payment became due and was not made.

Obligation payable only after demand

Some obligations require a demand before the debtor is legally in delay. If the agreement makes demand a condition for payment or no due date can be established, the timing and validity of the demand may affect accrual.

A creditor cannot necessarily postpone prescription indefinitely by simply choosing not to demand payment. Courts examine the contract, the nature of the obligation, and whether the creditor’s right was already enforceable.

When no prior demand is necessary

Article 1169 recognizes situations in which demand is unnecessary, including when:

the agreement or the law expressly says so;
the time of performance was a controlling reason for the contract; or
demand would be useless because performance has become impossible through the debtor’s act.

A promissory note may also contain a valid waiver of demand or an automatic acceleration clause. The exact wording matters.

Installment loans

For a debt payable by installments, each unpaid installment may ordinarily give rise to a cause of action when that installment falls due. The result may change if the note contains an acceleration clause making the whole unpaid balance due after one default.

An acceleration clause may be:

Automatic, under which the balance becomes due upon the specified default without further demand; or
Optional, under which the creditor must elect to accelerate the debt.

The prescription date for the entire balance therefore cannot be determined safely without reading the clause and checking what the creditor did after default. The Supreme Court has recognized the legal effect of acceleration clauses, including in Philippine Savings Bank v. Spouses Mañalac, G.R. No. 228435.

Principal payable with interest or annuity

Article 1151 provides a special rule for obligations to pay principal with interest or an annuity: prescription runs from the last payment of the annuity or interest. Its application depends on the actual structure and payment history of the obligation. Preserve receipts and account records showing the date and purpose of every payment.

What interrupts prescription?

Article 1155 of the Civil Code identifies three events that interrupt prescription:

Filing the action before the court;
A written extrajudicial demand by the creditor; or
A written acknowledgment of the debt by the debtor.

Interruption is more than a pause. When legally effective, the period already elapsed is generally erased and a fresh prescriptive period begins from the legally relevant event. The Supreme Court explained this effect in Overseas Bank of Manila v. Geraldez and applied it to written demands in Philippine National Bank v. Spouses Maranon, G.R. No. 212002.

Written extrajudicial demand

A demand should clearly identify:

the creditor and debtor;
the promissory note or transaction;
the principal balance and the basis of any interest or charges;
the default or maturity date;
the payment requested; and
a reasonable deadline and payment method.

Proof that the debtor received the demand is crucial. Keep the signed receiving copy, registry receipt and return card, courier tracking and delivery confirmation, or authenticated electronic records.

A verbal demand may establish delay for some purposes, but Article 1155 specifically requires a written extrajudicial demand to interrupt prescription.

Repeated demand letters should not be treated as a guaranteed method of extending a claim forever. Their timing, receipt, legal sufficiency, and good faith may be disputed. A demand sent only after prescription has already run does not, by itself, restore a lost judicial remedy.

Written acknowledgment by the debtor

Not every message mentioning an old account is a legally sufficient acknowledgment. The writing should clearly and unequivocally recognize a present, subsisting debt and the creditor’s right to collect it.

The Supreme Court has emphasized that acknowledgment must be clear, specific, and accompanied by an intention to recognize the continuing obligation. Disputing the statement of account, admitting only that a debt existed in the past, or discussing settlement without recognizing present liability may be insufficient. See Premiere Development Bank v. Central Surety & Insurance Co., G.R. No. 201881, Resolution dated 15 July 2024.

If prescription has already been completed, a mere acknowledgment is generally not enough. The Court has stated that it must be coupled with a new and positive promise to pay. The terms of that new promise may determine the extent of any renewed obligation.

Partial payment

A partial payment may be important evidence, particularly when accompanied by a signed receipt, payment instruction, email, message, or restructuring document identifying the debt. But do not assume that an unexplained deposit automatically satisfies Article 1155’s requirement of a written acknowledgment.

Document:

who made the payment;
when it was made;
which debt it covered;
how it was applied between principal, interest, and charges; and
any written statement accompanying it.

Filing at the barangay may affect the clock

Katarungang Pambarangay conciliation is generally a precondition when the dispute falls within the lupon’s authority—commonly, disputes between natural persons who actually reside in the same city or municipality. There are statutory exceptions, including disputes involving the government, certain public-officer matters, parties residing in different cities or municipalities subject to limited adjoining-barangay rules, and cases requiring specified urgent judicial relief.

Section 412 of the Local Government Code also allows direct court action in specified circumstances, including where an action would otherwise be barred by prescription.

Under Section 410(c), filing the complaint with the punong barangay interrupts the prescriptive period. The interruption does not last indefinitely: the period resumes upon receipt of the complaint or certificate of repudiation, or after 60 days from filing with the punong barangay, whichever occurs first.

Because a mistake here can cause a claim to prescribe, seek prompt legal advice when the deadline is close. Do not wait for ordinary barangay proceedings if the remaining time may be shorter than the process; the statute expressly addresses actions at risk of being time-barred.

A promissory note secured by a mortgage

A creditor may have both a personal action on the promissory note and a remedy against the mortgaged property, but the remedies and deadlines must be analyzed together.

Article 1142 sets a 10-year period for a mortgage action, generally counted from default. Starting an extrajudicial foreclosure is not the same as filing an action in a court for purposes of Article 1155. The Supreme Court has held that an application filed with the sheriff does not constitute a court action interrupting prescription.

A creditor must also avoid impermissibly splitting a single cause of action or pursuing inconsistent remedies. In the 2024 Premiere Development Bank resolution, the Court held on the particular facts that the bank’s prescribed foreclosure proceedings did not interrupt prescription and that its election of remedy prevented a later personal collection recovery. Mortgage cases therefore require document-specific advice before either remedy is chosen.

What if there is already a judgment?

A final judgment is different from the original promissory note.

Under Rule 39, Section 6 of the Rules of Civil Procedure, a final and executory judgment may generally be enforced by motion within five years from its entry. After that five-year period—but before the judgment is barred—a creditor generally must file an independent action to revive the judgment. Article 1144 gives actions upon a judgment a 10-year period.

The date of entry, previous execution proceedings, delays not attributable to the creditor, and any revival judgment can affect the calculation. A judgment creditor should not wait until the fifth or tenth year to act.

Does prescription erase the debt?

Prescription ordinarily bars the judicial action; it does not always mean that the historical debt never existed. Under the Civil Code provisions on natural obligations, a debtor who voluntarily performs after the civil action has prescribed generally cannot recover what was voluntarily delivered solely on the ground that the debt was already time-barred.

However, voluntariness, mistake, coercion, misrepresentation, and the validity of the underlying obligation may still be contested. A debtor considering payment, restructuring, or signing an acknowledgment of an old account should first verify the prescription history.

Prescription is also generally a defense that should be timely raised in the answer. A debtor should not ignore a summons merely because the claim appears old. Failure to respond can forfeit defenses or result in an adverse judgment, subject to the Rules of Court.

Interest, penalties, and collection charges

Prescription of the action is separate from determining how much is legally collectible.

Under Article 1956, conventional or monetary interest on a loan is not due unless the agreement to pay interest is expressly made in writing. Even when written, courts may reduce or invalidate interest and penalties that are iniquitous, unconscionable, or exorbitant.

In the absence of an enforceable stipulated rate, legal interest may apply under the Civil Code and Supreme Court jurisprudence. The current general legal rate is 6% per year, but its starting date and the amount on which it is imposed depend on the nature of the obligation, default, demand, judgment, and the written agreement. The Supreme Court’s consolidated guidelines are discussed in Lara’s Gifts & Decors, Inc. v. Midtown Industrial Sales, Inc., G.R. No. 225433.

Do not calculate the filing deadline by adding disputed interest or penalties to the principal. Prescription, court jurisdiction, filing fees, and the eventual award involve different rules.

Where and how to file a collection case

Small claims

A money claim not exceeding ₱1,000,000, exclusive of interest and costs, may qualify for small-claims procedure if it falls within the covered types of claims, including money owed under a contract of loan.

Small-claims cases are filed in the proper first-level court using the prescribed forms. Lawyers may advise a party before or after the hearing, but generally may not appear for or with a party at the hearing unless the lawyer is personally a party. The Supreme Court provides the current rules, forms, and Filipino translations on its Small Claims page and in the Rules on Expedited Procedures in the First Level Courts.

Small claims procedure simplifies litigation; it does not extend the prescriptive period or cure missing proof.

Regular collection action

Under Republic Act No. 11576:

First-level courts generally have exclusive original jurisdiction when the demand does not exceed ₱2,000,000, exclusive of interest, damages, attorney’s fees, litigation expenses, and costs.
The Regional Trial Court generally has original jurisdiction when the demand exceeds ₱2,000,000, subject to the statute’s exclusions and special jurisdictional rules.

Interest, damages, attorney’s fees, litigation expenses, and costs must still be specifically alleged and are included when computing filing fees, even though the statute excludes them when determining which court has jurisdiction.

Venue and prefiling requirements must also be checked. A personal action is generally filed where the plaintiff or a principal plaintiff resides, or where the defendant or a principal defendant resides, at the plaintiff’s election, subject to the Rules of Court, valid written venue stipulations, and rules for nonresident parties.

Practical steps for a creditor

Gather every controlling document. Obtain the original promissory note, loan agreement, disclosure statement, guaranty, mortgage, restructuring agreement, and amendments.
Build a dated payment history. Separate principal, monetary interest, penalties, and other charges. Identify the last payment and how it was applied.
Find the actual accrual date. Check maturity, installment dates, grace periods, acceleration provisions, waiver of demand, and default clauses.
Create an interruption timeline. List every written demand, its receipt date, every written acknowledgment, barangay filing, court filing, and payment.
Preserve proof of receipt and authenticity. Save originals, envelopes, registry cards, courier confirmations, complete email headers, chat exports, device backups, and business records.
Recompute conservatively. If two plausible dates exist, work from the earlier date until a lawyer confirms otherwise.
Check barangay conciliation immediately. Determine whether it is required, unavailable, or excused because prescription is imminent.
Send an accurate demand. Do not inflate the balance, claim unwritten interest, or threaten criminal prosecution merely to force payment.
File before the deadline. Negotiations do not automatically suspend prescription. A promise to “settle soon” is unsafe unless it amounts to a legally sufficient written acknowledgment or new agreement.

Practical steps for a debtor

Do not acknowledge or promise to pay an old claim before checking its dates and documents.
Ask for the note, payment ledger, assignments, demand letters, and computation of interest and charges.
Preserve proof of payment, releases, settlement messages, deposit slips, and bank records.
Confirm that the collector owns or is authorized to collect the account.
If served with barangay papers or court summons, respond on time and expressly raise prescription and other applicable defenses.
Do not assume a civil debt means imprisonment. The Constitution prohibits imprisonment for debt, but separate conduct—such as fraud or an offense involving a check—may raise distinct issues and deadlines.
Obtain advice before signing a restructuring, acknowledgment, waiver, or compromise agreement.

Evidence worth preserving

The most useful records commonly include:

the signed original or authenticated copy of the promissory note;
proof that money or property was delivered;
bank statements, deposit slips, receipts, and payment schedules;
written demands and reliable proof of delivery;
emails, text messages, and chat exports in their complete context;
written acknowledgments, settlement proposals, and restructuring documents;
notices invoking acceleration;
barangay complaints, notices, minutes, settlements, and certificates to file action;
pleadings, summons, orders, judgments, entry-of-judgment records, and writs of execution; and
documents showing assignment of the debt to a new creditor.

Keep original electronic files and devices where practical. Screenshots alone may omit sender details, dates, metadata, or surrounding messages necessary to authenticate the communication.

Common mistakes

Counting 10 years automatically from the date the loan was released.
Confusing the maturity date with the signing date.
Assuming every receipt, check, or text message creates a written contract.
Relying on verbal demands to interrupt prescription.
Sending a written demand after the period has already expired and assuming it revives the case.
Treating settlement discussions as an automatic suspension of the deadline.
Ignoring installment and acceleration provisions.
Assuming an extrajudicial foreclosure application is a court filing.
Filing directly in court despite mandatory barangay conciliation.
Staying in barangay proceedings while a deadline is about to expire.
Claiming interest that was never expressly stipulated in writing.
Ignoring a summons because prescription appears obvious.
Believing that small-claims procedure has a different or longer prescription period.

When legal help is urgent

Consult a Philippine lawyer promptly if:

the earliest possible deadline is within the next several months;
the loan is close to or more than six or 10 years old;
there were several renewals, restructurings, or partial payments;
the promissory note has an acceleration or waiver-of-demand clause;
the debt is secured by real estate, a chattel mortgage, or a guaranty;
the original creditor assigned the debt;
either party has died, become insolvent, or entered rehabilitation;
the interest and penalties may exceed the principal;
barangay conciliation may be required but prescription is near;
a foreclosure, attachment, or other provisional remedy is contemplated; or
summons, a statement of claim, a foreclosure notice, or a writ of execution has already been received.

Frequently asked questions

Is every promissory note collectible for 10 years after it is signed?

No. The 10 years generally run from accrual of the right to sue, commonly maturity or default. The signing date, maturity date, demand requirement, installments, and acceleration clause must be distinguished.

Does a demand letter restart the 10 years?

A timely written extrajudicial demand received before prescription is completed can interrupt prescription and start a new period. Its content, timing, receipt, and relationship to the claim must be proved. A demand made only after prescription has fully run does not revive the action by itself.

Can a text message acknowledge the debt?

Potentially, if its authenticity is established and it clearly recognizes a present, subsisting debt and the creditor’s right to collect. Ambiguous negotiations, a denial of the balance, or an admission that a debt existed only in the past may not be enough.

Does a partial payment restart prescription?

It may affect prescription, particularly if supported by a written acknowledgment identifying the debt. An unexplained payment should not automatically be treated as conclusive. Article 1151 may also be relevant where principal is payable with interest or an annuity.

What if there was no written promissory note?

An action upon an oral contract generally has a six-year period. Other writings may prove the transaction without necessarily changing its legal classification. The cause of action and evidence must be examined together.

Can an expired debt still be paid voluntarily?

Yes. Prescription may bar the court action without erasing every moral or natural obligation. Voluntary performance of a prescribed debt generally cannot be recovered solely because the judicial action had prescribed.

Is a collection case automatically dismissed because it is late?

Not necessarily. Prescription generally must be properly raised as a defense, although a court may address it when the relevant facts are apparent under the procedural rules. A defendant should file the required response and present the dates and documents supporting the defense.

Does filing at the barangay permanently stop prescription?

No. Section 410(c) of the Local Government Code limits the interruption. The period resumes upon receipt of the appropriate complaint or repudiation certificate, or after 60 days from filing with the punong barangay, whichever occurs first.

Can a creditor file small claims for a ₱1,000,000 principal plus interest?

The small-claims ceiling is ₱1,000,000, exclusive of interest and costs, provided the claim otherwise falls within the coverage of the rules. The interest claimed must still have a valid legal basis and supporting computation.

Is nonpayment of a promissory note a criminal offense?

Ordinary nonpayment is generally civil, and no person may be imprisoned merely for debt. Fraud, falsification, bouncing-check allegations, or other separate conduct may create distinct criminal questions, but criminal process must not be used simply as a collection threat.

Official legal sources

This article provides general legal information, not legal advice or a definitive computation for a particular account. Prescription depends on the complete documents, dates, payment history, communications, parties, and remedies chosen. Sources and procedures were checked as of 27 July 2026.