The 2009 Philippine Blog Awards

Thursday, July 30, 2009

FAMILY FIX: Filing Bankruptcy in the Philippines - An Option or Not for Debt-Stricken OFWs

A very concerned individual has asked this question in behalf of the many Filipina working as domestic workers in Hong Kong who had been taken advantage of by employment agencies and others, and many owe huge debts – far more than they are ever likely to be able to pay. The requestor of advice is a foreigner who is knowledgeable about bankruptcy law in his country. He wants to know, if under Philippine law, these Filipina women can file a bankruptcy and if the bankruptcy proceeding is a practical method for a person to get out of the burden of debts. He also wants to know if the person residing in Hong Kong would need to return to the Philippines in order to file bankruptcy.

My reply:

Please know that in my ten years of practice, I have not encountered this question so I honestly do not know the actual procedure in availing this remedy. The basis of my reply is book knowledge and not experience so I may not be the right person to advice you on the practicality of the approach.

Bankruptcy law in the Philippines is called the Insolvency Law under Act No. 1956 which took effect on May 20, 1909. The intention of the law-making power, in enacting the Insolvency Law, is to provide an adequate remedy for all creditors of a person who becomes insolvent. The law allows individuals or businesses ("debtors") who owe others ("creditors") more money than they're able to pay to either work out a plan to repay the money over time (or suspend payment) or completely eliminate ("discharge") most of the debts by filing either a Voluntary Insolvency or an Involuntary Insolvency.

In Voluntary Insolvency, an insolvent debtor, owing debts may apply to be discharged from his debts and liabilities by petition to the Regional Trial Court in the province or city in which he has resided for six months next preceding the filing of such petition. In his petition he shall set forth his of residence, the period of his residence therein immediately prior to filing said petition, his inability to pay all his debts in full, his willingness to surrender all his property, estate, and effects not exempt from execution for the benefit of his creditors, and an application to be adjudged an insolvent. He shall annex to his petition a schedule and inventory in the form herein-after provided. The filing of such petition shall be an act of insolvency.

The said schedule must contain a full and true statement of all his debts and liabilities, together with a list of all those to whom, to the best of his knowledge and belief, said debts or liabilities are due, the place of residence of his creditors and the sum due each the nature of the indebtedness or liability and whether founded on written security, obligation, contract or otherwise, the true cause and consideration thereof, the time and place when and where such indebtedness or liability accrued, a declaration of any existing pledge, lien, mortgage, judgment, or other security for the payment of the debt or liability, and an outline of the facts giving rise or which might give rise to a cause of action against such insolvent debtor.

The said inventory must contain, besides the creditors, an accurate description of all the real and personal property, estate, and effects of the petitioner, including his homestead, if any, together with a statement of the value of each item of said property, estate, and effects and its location, and a statement of the encumbrances thereon. All property exempt by law from execution 2 shall be set out in said inventory with a statement of its valuation, location, and the encumbrances thereon, if any. The inventory shall contain an outline of the facts giving rise, or which might give rise, to a right of action in favor of the insolvent debtor.

Based on my reading of the above cited provisions of the law, I frankly do not think that filing of an Insolvency proceeding is a practical approach. In fact, I wonder if this remedy is ever availed of at present times. You will note that the law was enacted in 1909, but when I checked the jurisprudence on the matter, the latest decision by the Supreme Court was dated way back 1940s. I found, however, a question on insolvency in the 2005 Bar Examinations. So my conclusion is this: no one is availing of the insolvency proceedings at present times and any reference to the law is only for educational exercise.

As provided in the provisions, the Insolvency proceeding is commenced by filing a petition in a Regional Trial Court in a province or city where the petitioner has resided for the six months prior to the filing of the petition. This means that the Filipina has to hire a lawyer to prepare the petition and for her to personally sign the petition. The signing of the petition cannot be delegated to a representative even if the attorney –in-fact is the lawyer himself. The court would not be able to acquire jurisdiction over the person until and unless a verified petition is filed in Court.

Wednesday, July 15, 2009

J.Reuben Clark Law Society First Year Anniversary Conference

August 21-22, 2009
Makati, Philippines

In behalf of the Organizing Committee of the J. Reuben Clark Law Society Philippines Chapter, I welcome you to Makati, Philippines for the First Year Anniversary Celebration of the Law Society. Thanks to Attys. Norman Nunez, Rodrigo Reyna, Josefina Olivete and Robert Cauilan, together with many other helpers who have made the Conference possible.

Our Theme is inspired by the talk ‘Learning to Serve’ by L. Tom Perry (Liahona, May 2002) and was aptly suggested by the Legal Aid Committee Chair, Atty. Reyna. We would recall that the Law Society was formed a year ago because of our desire to serve and to give one’s professional talent to bless the lives of others through a return to one of the noblest traditions of the legal profession – the legal representation of those in society who otherwise do not have equal access to the protection of the law. The first year has been a witness to the many Law Society members participation in the Legal Aid program which was inspired by the Law Society’s first Legal Aid case – the Annabel’s case. With this year’s theme, we hope to inspire more Law Society members to use their legal skills to enrich and bless their communities, stakes and wards through service in a way that Nephi described ‘with all the energies of my soul, and with all the faculty which I possessed’ (1 Ne. 15:25).
“Service is the virtue that distinguished the great of all times and which they will be remembered by. It places a mark of nobility upon its disciples. It is the dividing line which separates the two great groups of the world—those who help and those who hinder, those who lift and those who lean, those who contribute and those who only consume. How much better it is to give than to receive. Service in any form is comely and beautiful. To give encouragement, to impart sympathy, to show interest, to banish fear, to build self-confidence and awaken hope in the hearts of others—in short, to love them and to show it—is to render the most precious service” (quoted in Steven R. Covey and others, First Things First [1994], 306).

Our Program is both informative and stimulating. It will help us better understand our religious conviction, our profession and the venues and avenues in the legal field where we can render the most precious service and feel the joy that comes only through a selfless service and sharing.

Our Speakers are all learned and able. They bring considerable professional expertise to their roles. They include a range of LDS presenters and non LDS speakers. Our panels will be of very high quality. We are thrilled to have confirmed acceptances from Quezon City RTC Judge Elisa Sempio Diy who will share insights about being a Judge in the Family Court, our Philippine Area President Keith R. Edwards, who is also a lawyer by profession before being called to the Quorum of the Seventy will be our keynote speaker for the opening program of the Conference and Atty. David Berrett of the Office of General Counsel – Asia, will be our inspirational speaker during the closing program.

Our Venue is the Buendia Chapel located at Dela Costa St., Makati City. As you would recall, the Buendia Chapel is the same venue for the Law Society’s Grand Launching and Induction Ceremony last August 21, 2008 (see ‘Philippines Country Website’ August 21, 2008 and Liahona Magazine February 2009 issue) and so we feel that it would be a fitting site for the first year anniversary and provides the perfect venue for the working sessions of the event. Historically, Buendia Chapel is the very first chapel built by the LDS Church in the Philippines. Its location also is another factor for the choice of the venue. Urban lifestyle and affluence are nowhere more pronounced in the Philippines than in Makati, the country’s classiest city. Bustling and modern, it is the country’s model for city planning, rising in less than a decade from vast stretches of empty land to become the nation’s premier city. The affluent city southwest of Makati is the country’s financial center, earning it the nickname, “Wall Street of the Philippines.”
We will adjourn to the Bayan Chapel in Dasmarinas Cavite for our Closing Program and Dinner and be able to have a smell of fresh, cool air and a magnificent view of the country side on our way there. Before leaving Makati, we will have a brief visit to the World War II Manila American Cemetery and Memorial located at Fort Bonifacio in the district of Taguig, which is just the opposite side of the Buendia Chapel across Edsa. The cemetery is the final resting place for 17,206 American military dead lost during the War in the Pacific for New Guinea and the Philippines. A monument is inscribed with the names of 36,285 Americans whose remains were never found or identified. Twenty-five large mosaic maps around the chapel depict the Pacific campaigns. For Church history, the American Cemetery was where, Elder Gordon B. Hinckley, then Assistant to the Twelve, met with a small group of local servicemen, American residents, Filipino members and their families last April 28, 1961, to offer a prayer for the islands and open the islands for missionary work. The first missionaries, Elders Ray Goodson, Harry Murray, Kent Lowe and Nestor Ledesma, arrived in Manila on June 5, 1961.
Our Delegates will include practitioners, students, judicial officers, government employees , key Church leaders and their families. They will provide an interesting range of perspectives, insightful comments, and provocative questions. We need and value your participation and contribution. Each delegate will inform, enlighten and uplift each other.
We look forward to seeing you all at the Conference. Please come prepared to enjoy the spirit and fellowship of our learned friends in the Law.

Secretary General