This guide explains the Philippine civil-case process, your rights as a borrower, common defenses, and practical steps—from the day you receive court papers through judgment, settlement, or appeal. It’s general information, not legal advice for your specific case.

1) First things first: what counts as being “sued”

You are being sued only when you receive court-issued papers—typically a Summons with an attached Complaint and sometimes a set of judicial affidavits or annexes (e.g., your electronic loan agreement, payment ledger, screenshots). A demand letter from a collector or “final notice” is not a lawsuit.

How you’ll be served

Personal service (handed to you) is standard.
Substituted service (left with a person of suitable age at your residence or office) or service by mail/courier/e-mail may be allowed in certain situations.
If you never actually received the Summons, you can challenge improper service—but don’t ignore the case. Raise it in your first filing.

2) Deadlines you must not miss

Ordinary civil action (Regional Trial Court or first-level courts, regular procedure)

Answer due within 30 calendar days from receipt of Summons.

Small Claims (first-level courts)

For straightforward money claims within the small-claims limit, you’ll file a Verified Response using the court form within 10 calendar days of receipt of Summons.
A one-day hearing follows; lawyers are generally not allowed to appear (you represent yourself), but you may consult a lawyer when preparing your Response.
No appeal—the decision is final and unappealable, though certain extraordinary remedies are possible only in exceptional cases.

Tip: If the Complaint or Summons doesn’t clearly say “Small Claims,” assume regular rules and file an Answer within 30 days—earlier if you can.

3) Map your case quickly (a 60-minute triage)

Calendar your deadline (30 days or 10 days).
Identify the plaintiff
- Original lender? Financing or lending company? Debt buyer/assignee?
- If an assignee sues, they must prove the assignment (e.g., deed of assignment, chain of title).
Check the lender’s status
- Legitimate online lenders must be SEC-registered and (if applicable) hold a Certificate of Authority to operate as a lending/financing company.
- Unregistered operation is penalized; at minimum, it can be a strong argument to disallow or reduce interest/fees and question standing.
Pin down the claimed amount: principal, interest, penalties, “service fees,” attorney’s fees, and how they were computed.
Collect your evidence: screenshots of the app, e-mails/SMS, payment proofs (GCash/bank), ledger, IDs requested, and harassing messages (for separate complaints).
Venue and jurisdiction: Was the case filed where you reside or where allowed by contract? If not, raise improper venue.
Arbitration/mediation clauses: Some click-wrap contracts have them. Enforceability depends on wording and consumer-protection rules; raise it if favorable.

4) Your immediate options

Defend the case by filing an Answer (or Verified Response for small claims) on time.
Move to dismiss before an Answer only on limited grounds (e.g., lack of jurisdiction over your person due to invalid service, improper venue on the face of the Complaint).
Negotiate while defending: you can seek a payment plan or compromise without admitting liability in your court filings.
Do nothing (risky): you may be declared in default, and the court can render judgment without your side of the story.

5) What to put in your Answer/Response (practical checklist)

A. Admissions/Denials

Admit what’s undeniably true (e.g., you borrowed ₱X on date Y).
Specify denials: amount claimed, interest/penalty computation, alleged defaults, assignment to a new creditor, and any fees not agreed to.

B. Affirmative defenses (raise them up-front)

Improper service of summons (no valid service = no jurisdiction over you).
Lack of standing/real party in interest (assignee hasn’t proven assignment).
Improper venue under the Rules or contract.
Unenforceable or void stipulations (e.g., hidden charges, one-sided attorney’s fees).
Prescription (collection on written contracts generally prescribes after 10 years; shorter periods may apply to some quasi-contracts/penalties).
Unlicensed/unauthorized lending activity affecting the recovery of interest/charges.
Prematurity (if contract requires prior steps like formal demand).

C. Substantive defenses (cutting the amount)

Unconscionable interest and penalties: Even without usury ceilings, courts routinely reduce excessive rates and penalty charges under the Civil Code.
No proof of amount due: Require complete ledger, breakdowns, and proof of how interest/penalties were computed.
Improper fees: “Processing,” “convenience,” “referral,” “collection” fees often need clear contractual basis and may be slashed if unreasonable.
Payments not credited: Attach receipts/screenshots and ask for a judicial accounting.

D. Counterclaims

Damages for abusive collection (if you can prove harassment, public shaming, or illegal disclosures).
Attorney’s fees/costs if you are forced to litigate plainly inflated or bad-faith claims.

Attach: your ID, copies of the e-contract, payment proofs, screenshots of the app interface, and harassing messages (with dates, sender IDs, and numbers).

6) Electronic contracts and evidence

E-signatures and click-wrap agreements can be binding, but the lender must show authenticity (how the contract was formed, device/number used, OTP logs).
Electronic Evidence Rules allow screenshots, e-mails, SMS, and logs—provided you explain how you captured and preserved them (keep originals and metadata where possible).
Ask for the lender’s system logs, loan-management records, and KYC files in discovery if the case goes past preliminary stages.

7) Interest, penalties, and caps (how courts trim them)

The Anti-Usury Law ceilings are no longer fixed, but courts strike down or reduce shockingly high interest and penalty rates as unconscionable.
Contractual penalties can be mitigated when they’re iniquitous or disproportionate.
Attorney’s fees demanded as a fixed percentage (e.g., 25%) are not automatic; creditors must justify them, and courts often reduce them.

Strategy: Even if you borrowed and defaulted, meaningfully disputing the rate, penalties, fees, and proof of assignment can cut claims dramatically.

8) Abusive collection and privacy violations

Common unlawful tactics with some online lenders/collectors:

“Shaming” borrowers by messaging your contacts or posting threats in group chats.
Harassment (insults, doxxing, threats of jail for mere nonpayment).
Excessive phone permissions (scraping your contacts/photos).

What you can do:

Document everything (screenshots with timestamps, call logs, numbers used).
File complaints with:
- The Securities and Exchange Commission (SEC) for abusive collection and unlicensed lending.
- The National Privacy Commission (NPC) for Data Privacy Act violations (unauthorized contact-list scraping, disclosures).
Consider counterclaims for moral/exemplary damages if the abuse ties to the lawsuit.

Nonpayment of debt is not a crime by itself. Threats of arrest for mere nonpayment are empty and unlawful. Separate criminal liability may exist only if there are independent criminal acts (e.g., estafa through deceit, bounced checks under BP 22, identity theft)—not for simple inability to pay.

9) Settlement, mediation, and payment plans

Court-Annexed Mediation (CAM) and Judicial Dispute Resolution (JDR) are standard after the Answer, except in small claims (which already has a simplified track).
You can negotiate:
- Waiver/reduction of interest and penalties,
- Stretch-out installments,
- Lump-sum discounts (often best leverage is early in the case or before default judgment).
Put any deal in a Compromise Agreement and ask the court to render Judgment on Compromise (immediately final and enforceable).

10) What happens after judgment (and how to protect assets)

If you lose and don’t pay:

The creditor can seek execution: bank garnishment, levy on non-exempt property, or writs sent to your employer or bank.
Some assets and benefits are exempt (e.g., certain retirement benefits, and the family home is generally protected subject to legal exceptions).
Salary/wage execution may occur through employer garnishment if the court orders it; check exemptions and limits and contest excessive or improper writs.
You can ask the court for installment payment or a stay under specific rules, especially in small claims judgments.

If you win or the amount is reduced:

Secure a certified copy of the judgment.
If you paid during litigation, demand an updated release and quitclaim and request the court to dismiss or enter satisfaction of judgment.

11) Long-term fixes if you’re drowning in debts

Debt consolidation (one lower-rate loan to pay higher-rate apps).
Out-of-court workouts with major creditors.
Court options under Philippine insolvency laws may include individual liquidation (for truly hopeless insolvency) and suspension of payments in limited scenarios. These are serious measures—get personalized legal counsel.

12) Step-by-step action plan (template)

Day 0–2

Photograph/scan the Summons & Complaint (all pages, with envelopes).
Calendar your Answer (30 days) or Small Claims Response (10 days) deadline.
List every loan referenced, with principal, dates, and amounts paid.

Day 3–7 4. Draft your Answer/Response with: specific denials; affirmative defenses (service, venue, standing); and defenses on interest/fees. 5. Assemble exhibits (receipts, screenshots, ledger disputes). 6. Prepare a settlement position (what you can actually pay).

Day 8–14 7. File and serve your Answer/Response (keep stamped copies). 8. Start mediation prep: ability-to-pay worksheet; proposed terms. 9. If harassed, file SEC/NPC complaints in parallel and keep case numbers.

After filing 10. Attend all hearings; bring originals and IDs. 11. Evaluate any compromise; insist on full release language. 12. If judgment issues, act promptly on execution or post-judgment negotiations.

13) Useful drafting snippets

A. Denial of amount due

“Defendant specifically denies the alleged outstanding amount for lack of basis and proof. Plaintiff failed to attach a complete and duly authenticated ledger and the computation of interest and penalty charges.”

B. Unconscionable charges

“The stipulations on interest, penalties, and attorney’s fees are iniquitous and unconscionable and should be annulled or reduced under the Civil Code and prevailing jurisprudence.”

C. Improper service of summons

“This Court has not acquired jurisdiction over Defendant’s person due to invalid service of Summons, which must result in the dismissal of the Complaint.”

D. Lack of standing (assignment not proven)

“Plaintiff is not the real party in interest. The alleged assignment is unproven; no deed of assignment or chain of title has been offered. The Complaint must be dismissed.”

14) Frequently asked questions

Q: The collector says I’ll be jailed tomorrow if I don’t pay. A: False for mere nonpayment. Record the threat; it supports damages and regulatory complaints.

Q: The app messaged my relatives and officemates. A: That can violate data-privacy and debt-collection rules. Preserve evidence and complain to the NPC/SEC; you may also seek damages.

Q: I paid but they keep adding fees. A: Demand a full ledger and challenge undocumented or excessive charges. Courts can slash unconscionable rates and penalties.

Q: Can they take my house or salary? A: Only after judgment and through court-supervised execution, and exemptions apply. You can contest an improper or excessive levy/garnishment.

Q: The contract has arbitration. Do I still go to court? A: Raise the clause early. Courts may refer the dispute to arbitration if valid and applicable; consumer-protection considerations can affect enforcement.

15) Documents to bring to any consult or hearing

Summons & Complaint (complete).
Government ID.
Electronic loan contract(s) and app screenshots.
Payment proofs (bank/GCash history).
Communications with the lender/collector (SMS, e-mail, chat).
Contact-list/harassment evidence (with dates and numbers).
Any prior demand letters, settlement offers, or release documents.

16) Key takeaways

Don’t ignore a Summons—30 days (ordinary) or 10 days (small claims) is your lifeline.
You can win or reduce claims with solid defenses: service/venue/standing, defective proof, and unconscionable interest/penalties.
Harassment and shaming are unlawful—document and report them.
Settlement works best when you defend and negotiate at the same time.
If overwhelmed by multiple loans, explore structured workouts or, in extreme cases, formal insolvency options with counsel.

Final note

Procedural thresholds (like the small-claims amount), interest-rate caps for certain products, and filing practices change from time to time. Before filing, double-check the current rules and forms at your local courthouse or consult a Philippine lawyer or the Public Attorney’s Office (PAO) for guidance specific to your case.