LEGAL QUESTION: LAW ABOUT LENDING MONEY and BORROWED MONEY?

Question

Hope someone can help me regarding this legal issues,


My mother and her friend decided to put up business of lending money. Her friend is the one who invest capital (650 thousand, PESOS (Philippine Money) for the said business and my mom is the one who looks for the borrower). In the early months of their business, it all went well, that was 2007 then. By 2008, almost all of the borrowers had a hard time to pay the amount that they borrowed.By 2009, due to unpaid money by the borrowers, my mom is the one who pays for it in installment. My mom already paid her friend 800 thousand - 1M pesos. Her friend, harass her in a way by demanding her to pay more than the capital due to its interest, For years, my mom paid her a really huge amount of money. She was also forced to sign this document that state that she will be the one who pays for the borrowed money and its interest., Due to the demand of her friend and her harassing way to get money from my mom, my mom even give the title of our house to her friend due to her friends demand of collateral. She even borrowed money from other people just to gave money to her friend. Her debts went high coz she's afraid that she might be inprison as per se by her friend.When i found about it hours ago, i was really hysterical about it. I didnt agree to pay the amount the her friend wants us to pay. She wants us to pay 3,8Million pesos due to the interest of money that was borrowed which is originally 650 thousand pesos. Its really hard for me to accept that we been through a lot due to her friend. There were times that we didnt have money to buy food for meals. Its hard for me not to talk knowing and seeing my mother being harassed by her friend, being abused emotionally and verbally by her friend and seeing my mother worrying where to borrow money just to pay her friend and being saved from the shame, the emotional stress and verbal abused of her friend.

My question is:
1. Since the title of our house was given as collateral to her friend (coz my mom's friend keeps on harassing her to gave her money) without my father's consent, Since they're both the owner of the house,is there a possibility that the ownership be transferred to my friend's mother?

2. Is the document signed by my mom ( by force) valid?

3. Is it really my mother's responsibility to pay for the unpaid money?

4. Is 650 thousand pesos (which is the initial capital of their lending business which eventually, borrowers were unable to pay) to 3.8 million pesos interest fair? Her friend is calculating the interest from 2008-2012.

5. Is there any legal case that we can file against her friend since, she is using force in my mother just to pay her and the interest that she's calculating. My mom is verbally, emotionally abused by her friend. She always shout on my mother (even in crowd), she forced my mother to sign the document that states the she has to pay for the borrowed money and its interest,..

Hope someone can enlighten me with this one. Thank You in advance.

Answer 1

You mother signed an agreement to which she is now being held. In a way, she is responsible to uphold that agreement. If things had gone well and the loans were successful, your mother would be expecting her friend to pay the commissions or returns or whatever was agreed. Having said that, there are other ways this can work out in your mother's favor. Where are you located? There are laws that protect people like your mother against contracts that are unreasonable or usurious, which means charging a borrower interest at an exorbitant or illegally high rate. This contract sounds usurious. Your mother and father should see an attorney immediately. If there's no money for an attorney, depending on where your are there might be legal aid available, where a lawyer will assist with advice for free or for a nominal amount. Your mother's friend seems to have already been repaid handsomely and seems to be vindictive. Get legal help. Good luck to your family. I wish I could know how this finally turns out. Good luck anyway.

Answer 2

Truth In Lending Act Philippines

Answer 3

Please refer to the different Philippine Laws regarding Lending Money or Loans.. You have the RA 3765 (The Truth in Lending Act, Act 2655 about fixed interest rates by the Monetary Board of the BSP in which only last week, the Monetary Board—the country’s policy-making body on money, banking and credit—changed the legal rate of interest for loan and credit agreements.

Through Circular No. 799, the board declared that, effective July 1, “the rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of an express contract as to such rate of interest, shall be 6 percent per annum.”

This means that if the parties fail to state in writing the interest payable on any of the transactions mentioned, or on account of a court judgment involving a related money claim, the imposable interest is 6 percent every year, and of course the Civil Code of the Phil. (Art. 1337, 1339 etc.) Actually you can search these in the web...



I just hope that these people who take advantage to the weaknesses of other people will have a conscience, to know that what they are doing was wrong..

Answer 4

my friend borrowed money from our neighbor with and interest of 10% monthly. last year she was no able to pay for months coz her husband had no job that time and when her husband back to work and now starting last september and october she stared paying ...and why is it that the man he owed money went to the police station and have her to appear in the police office is it proper and is this 10% monthly proper and the man having this business has no license from the secutities and exchange commission.

Answer 5

hello po!...may katanungan po ako, like may kaibigan kasi yong kapatid ko na nanghihiram ng pera sa kanya worth 20 thousand pesos (Philippine Money) promised to pay her with in 20 days with interest kasi dw ipohonan sa business..at yong ate ko nmn pumayag kc may interest pero yong conversation nila tru messenger lang kc nasa abroad ate ko..tapos pag dating sa tinakdang araw ng msg siya sa ate ko na hindi daw muna xa mak bayad kc ganito ganun may dahlan xa...so pinagbigyn 1 month after ngbayad xa 1k kumbaga nalagay na sa hulugan which yong usapan ibalik ang buong pera plus interest pero ok lng inintindi ng ate ko...after nung 1 month na nagbayad ng 1k wla nang kasunod may dahilan na nmn siya again inintindi ulit ng ate ako...wla na talaga sa usapan...2,3,4 month as in d na talaga xa nghulog, kya na alarma ate ko pinapuntahan niya sa akin at nakaharap ko ung kaibigan nya at ayon nag promise ulit na monthly xa maghuhulog 500..ayon dating 1k naging 500 pero ok lng atleast maghuhulog na xa...after nmn nung nghulog xa ng 500 wla na nmn...kumbaga pra bang nagkalokohan na sila..kaya naka decide ate ko na mag file na kami ng complain sa kanya at bali ako ung representative niya may authorazation letter nmn galing sa ate ko with pirma nya...anu po ba pwdng i file sa knya? salamat po

Answer 6

I would like to know more about your case... ... Keep updating brother... How is your mom now..,the situation could be very stressfull