In times of financial difficulties, we turn to our relatives, friends and even colleagues for assistance. Once they extend a loan, we agree to pay the money we borrowed within the agreed period. If we borrow a large amount of money, a written agreement is created to ensure that money will be collected. However, not all of us can meet our payment obligations. Once we fail to pay, within the period agreed upon, the lender will be forced to impose penalties. When it comes to the lender's right to demand payment, it is essential to keep the prescriptive period into consideration.
The New Civil Code of the Philippines states that:
“Art. 1144. The following actions must be brought within 10 years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.”
Art. 1423. Obligations are civil or natural. Civil obligations give a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof. Some natural obligations are set forth in the following articles.
A written agreement serves as evidence of the lender's right to demand payment. If the debtor fails to pay the debt within one year as agreed upon, it is imperative for lenders to put pressure on the debtor to make a payment.
Article 1155 of the New Civil Code of the Philippines also states that, "The prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor."
