I will assume that you are in debt to a typical loan shark money lender in the Philippines. Let’s say that you borrowed 200 pesos for the week until payday when you will have to pay him 300 back. Yes, That outrageous rate of interest 50% a week is standard in the Philippines.
The typical loan shark has made you sign a post-dated check for money you don’t have on an account you don’t have. He insisted upon this as his “security” because you had no other collateral to give him. Or maybe he gave you no other option.
You both know that if you don’t pay on time, he will put the bad check through. When it bounces, he files a statement with the police. At that point you will be guilty of many crimes-passing bad check, forgery, fraud, etc etc etc. You could be arrested, and jailed for many months before any trial –—- especially if the money lender has an “arrangement” with the local cops to act as his enforcer. If he does his own enforcement , you could be in worse *trouble* than merely going to jail.
OK. Back to the question: Assuming you didn’t pay the loan shark promptly on the date your 300 Pesos was due. What should you do? If you have any money, you get in contact and work out a compromise. Do whatever you have to do to get out of debt. The loan shark would be very happy to keep your debt increasing to the point where you can never pay it off fully, but will be stuck giving him most of your earning every paycheck. Obviously, if you can pay off the loan plus his “vigorish” or excessive interest, and settle up completely, that is the best option.
This leads me to the quote from Benjamin Franklin about debt and money lenders:
“I would rather go to bed hungry than wake up indebted for last night’s dinner.”
In other words:
NEVER, NEVER, NEVER, NEVER, NEVER borrow for consumer or emergency expenses.
Especially not from loan sharks, Stay out of debt unless it is “no recourse, other peoples money” you use only for sure investment deals. Deals that will yield you far more than the cost of interest and principal needed to pay off the loan— long before it is due.
Phew. That was a long sentence. Let me try again.
Don’t ever borrow money for anything except really outstanding business deals where you know you will come out with a big profit. Consumer loans or credit card loans make absolutely no sense. Loan shark loans make you a slave to the loan shark. It is common to be forced to do something highly illegal (like transporting dope) to make you loan interest payments.
Finally, regardless of the loan situation, if I had any way to get hold of money for the loan payment a day or two late, I’d try to get in writing, a statement from the lender that they will waive (or at least drastically reduce) all late charges and penalties before I plunked down or sent in my payment on my account. Without an agreement, your payment may be entirely used for late charges. You really must figure out a way to pay off the loan entirely. Without a full settlement and release (IN WRITING!), your debt is always going to be increasing and compounding!
See my other answers about making money. Stay out of debt! Pay off any outstanding loans as soon as possible. If you can’t pay, file bankruptcy and never go into debt again *.
*If your loan was from a criminal syndicate, when they break your legs, you will probably never walk again, either.
NEVER, NEVER, NEVER, NEVER, NEVER borrow from a loan shark. Never borrow from anyone or on your credit cards for consumer or emergency expenses.I would not go into the money-lending business as a loan shark because it is just too unsavory.