imroving profitability through nncc operation

Numeriano Erdulfo “Erling” Sison,CPA, Ll.b.

Improving Profitability Improving Profitability Through No-Nonsense Through No-Nonsense Credit and Collection Credit and Collection

OperationOperationResource Speaker:

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GUARANTEEING DEBTS

(Sirach 29: 14-20)

A good man is willing to guarantee his neighbor’s debts. Only someone who has lost all sense of decency would refuse to

do so. If someone does this favor for you, don’t forget it; he has risked his

good name for you.

MORAL PERSPECTIVE OF CREDIT & COLLECTION DISCIPLINE

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(Sirach 29: 14-20)

…… There are some ungrateful sinners who abandon those also stand behind them, and

they cause them loss of property.

Guaranteeing loans has ruined many prosperous men and caused them

unsettling storms of trouble. Influential people have lost their homes over it and

have had to go wandering in foreign countries.

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(Sirach 29: 14-20)

….. A sinner who hopes to make a profit by guaranteeing a loan is going to find

himself involved in lawsuits. So help your neighbor as much as you can, but protect

yourself against the dangers involved.

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LOANS AND REPAYMENT

(Sirach 29: 1 - 7)

Be kind enough to lend to your neighbor when he needs help. You are keeping the

Lord’s command if you help him. If he needs something lend it to him.. If you are in debt, pay it back as soon as you can. If you meet your obligations you will always

be able to borrow what you need.

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(Sirach 29: 1 - 7)

…. Many people treat a loan as something they found and can keep, causing embarrassment

to those who helped them.

Some people will speak politely, bow and scrape until they get the loan they want, but when the time comes to pay it back, they will put it off and say that, it’s inconvenient, and

make lots of worthless excuses.

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(Sirach 29: 1 - 7)

….. If the lender insists on being paid, he can count himself lucky to get back half. If he doesn’t insist, the borrower has robbed him and made an unnecessary enemy. All

the lender will get from him are curses, insults and disrespect, but never any

gratitude. Many people refuse to lend at all, not because they are stingy, but

because they don’t want to be cheated if they can avoid it.

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1.Trust / Confidence

2.Risks

3.Term

4.Exchange of Values

Elements of Credit

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Basis of Credit

Character/Trustworthiness

Capacity/Term

Capital/Capacity/Capability

Condition/Risk

Exchange of Value

CREDIT & COLLECTIONPRINCIPLES/PRACTICES

1. Credit is earned; and a privilege, not a right;

2. The financial security, sustainability of the creditor is the principal consideration rather than the sale of credit target one set to accomplish;

3. Credit must be granted only to persons possessing the positive traits and attributes of trustworthiness, integrity, capability and capacity to earn, save and repay one’s financial obligations;

4. The credibility, collectability and protection of the credit granted must take precedence over expansion or growth; and, must be given positive attention, action;

5. Financial soundness, operational effectiveness, efficiency and security of the creditor must be balanced against risks, diversification, expansion and profitability;

7. To balance risks of credit granting for growth and expansion, realistic credit limits be set for the target market within the geographical areas of operations;

8. Credit must not be extended to one who is habitually delinquent;

9. Each credit applicant must properly be credit investigated, evaluated, properly documented, expeditiously registered with the proper government agency in applicable cases, faithfully and efficiently collected;

10. Credit must not be motivated and granted principally by reason of the collateral or security offered. It’s the collection of the credit granted arising from being a going concern, which develops positive capacity rather than the acquisition of the collateral or security;

6. Debtors must not be given credit much more than what they can reasonably, effectively, efficiently repay;

12. The credit and collection and sales operations must be in positive symbiosis to attain overall objective

13. Decisiveness and expeditiousness in collection efforts on all fronts of collection venues be positively undertaken within and without the creditor’s organization to prevent, avoid and minimize bad debts;

14. A bad compromise is better and pragmatic than a long contentious, expensive litigation – a peso in collection is better than zero;

15. Don’t cry over spilled milk. Learn from your negligence; take your loss, write-off the bad account

11. Set a workable system of monitoring, evaluating and expeditious action and system on perceived and/or actual credit danger signals from debtors;

Population as it impact on the sales, marketing arena of commerce and industry;

The gross national product which reflect the economic performance of the country;

The savings potential of the population to determine their disposable income and which determine to what sector of the population must be extended or not liberal or restrictive credit;

The public sector debt (deficit) which has a direct bearing in the availability of macro-credit; and, as stimulus for socio-economic activity, as well as, its effect on the cost of money;

The debt service of the country as it directly impact on public sector’s ability to stimulate the economy;

Interest ceilings rates which determine the cost of money for credit transactions;

Consumer price index which indicates the market environment for sellers and buyers in their interplay in the open market through credit.

The nation’s (and regional) buying and credit culture for the sales and credit professionals to be able to develop programs of selling and marketing; and, credit and collection strategies/ tactics;

Family Income Expenditure SurveyAdjusted to Inflation 2006

Unadjusted

Adjusted

Total Ave. Family Income 2.99T 2.5T

Total Ave. Family Expenditure

2.56T 2.14T

Total Ave. Family Savings per month

P21,000

Gini Coefficient .4546 .4605

Gini coefficient is the measure of income disparity between classes or within a population.

The perfect range is; 0-1 with 0 as the perfect income, equality among classes/families and indicate absolute income disparity or inequality.

100%

85%

15%

Family Expenditure Pattern

Major Expenditure

Items

2006 2003All Income Group

Bottom30%

Upper70%

All Income Group

Bottom30%

Upper 70%

Total Expenditure (Billion) Percent

2561 266 2295 2038 212 1827

100% 100% 100% 100% 100% 100%

1) Food Expenditures 41.4 59.1 39.3 43.1 60.2 40.0

2) House Rental 12.7 9.0 13.2 13.1 8.8 13.6

3) Transportation & Communication

8.2 3.8 8.7 7.3 3.2 8.2

4) Fuel, Light & Water

7.6 7.3 7.7 6.5 6.6 6.6

5) Education 4.4 1.3 4.7 4.0 1.3 4.5

Major Expenditure

Items


Bottom30%

Upper70%

All Income Group

Bottom30%

Upper 70%


2561 266 2295 2038 212 1827

100% 100% 100% 100% 100% 100%

6) Personal Care & Effects

3.7 3.7 3.7 3.9 3.7 4.1

7) Other Expenditures 3.0 3.3 3.0 2.9 3.2 3.3

8) Medical Care 2.9 1.7 3.0 2.2 1.4 2.3

9) Special Family Occasions 2.8 1.7 2.9 2.6 1.6 2.8

10)Durable Furnitures Fixtures

2.7 0.8 2.9 2.6 0.8 2.8

Major Expenditure

Items


Bottom30%

Upper70%

All Income Group

Bottom30%

Upper 70%


2561 266 2295 2038 212 1827

100% 100% 100% 100% 100% 100%

11) Clothing, Footwear Etc. 2.4 2.0 2.5 2.9 2.5 3.0

12) House Operation 2.3 1.8 2.4 2.2 1.7 2.113) Taxes 1.6 0.5 0.6 2.1 0.2 2.314) Tobacco 0.9 1.7 0.8 1.1 2.0 0.915) Alcoholic Beverage 0.7 1.2 0.6 0.7 1.2 0.6

Major Expenditure

Items


Bottom30%

Upper70%

All Income Group

Bottom30%

Upper 70%


2561 266 2295 2038 212 1827

100% 100% 100% 100% 100% 100%

16) House Maintenance/ Repairs 0.6 0.2 1.8 0.7 0.5 0.8

17) Recreation 0.5 0.2 0.5 0.5 0.2 0.5

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Objectives Of Collection Operations

1) Collect credit/loans granted thereby increasing profits;

2) Improve quality of work thru positive cooperation with loan operations via accurate, expeditious decision, thorough exercise of the collection functions;

3) Increase loan volume – collected expeditiously within the loan term;

4) Cost-effective expense per loan granted resulting from improved planning, direction and supervision;

5) Greater satisfaction to all concerned, resulting from a attainment of the results that are expected;

6) Dynamic credit and collection operation buttress by skills and art of the discipline by the rank personnel but most important the ability to;

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b) Build/nurture the collection force;

c) Skills in delegating responsibility and monitoring accountability for results;

d) Review, appraise collection operation in conformity with the set goals, objectives, standards, practices and effect remedial collection efforts wherever, whenever needed;

e) Inspire confidence, motivate for teamwork and maintain growth;

a) Analyze, plan, develop objectives, policies, procedures and program to have the field personnel performance improve and attain goals.

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1. The Primary Objectives of a No-Nonsense Collection System are: a. To safeguard the integrity / collectibility of the

accounts receivable; b. To have a good cash flow via an effective system that

secure prompt payment;c. Retention of debtors’/customers’ goodwill through use

of policy aging motivating and appealing collection techniques;

d. A workable program for assisting and rehabilitating delinquent or distressed account/ debtor;

e. The synchronization of the creditor's collection system with the prevailing economic/ financial conditions;

f. As a check and balance between the sales and credit, collection operations of a company;

g. As a basis for some incentive program.

Collection Policies

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2.Collection – Out of Court a. Current Accounts - Any and all individual current

account of customers shall be collected by the sales credit and collection departments working in tandem; The maximum period to exert out of court collection efforts on company’s accounts shall not be more than ninety (90) days. Thereafter, legal collection effort shall take place to be undertaken by the attorney of the company taking, into consideration the feasibility, economics of collection;

b. Delinquent Account – the retained or house attorney of the company shall be responsible for collecting extra-judicially or legally delinquent accounts depending on the economics and feasibility of collecting the account; c. Distressed/Bad Accounts – the collection agency or the attorney engaged by the company shall be tasked, responsible for the collection of distressed/bad accounts generally under “contingency fee” basis of collection

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Many people refuse to lend at all, not because they are stingy, but because they don't want to be cheated if they can avoid it. "

Collecting money claims may they be current, delinquent or bad account receivables, is a tedious, frustrating, and exasperating process.

The science and art of collection requires tenacity and immense fortitude on the part of the collector. The collector's success or failure is, to a large extent, dependent on his education, knowledge, his appreciation of the issues and its consequences and on his experiences.

THE SCIENCE AND ART OF COLLECTION

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Science of collection deals with credit policies and procedures; the art is implementing them. The science and art of collecting can untie huge amounts of accounts receivable, thereby helping strengthen the financial stability of a company by infusing the company with its lifeblood - cash.

A collector can improve his collection by effectively using the basic tools of his trade - the accepted paradigms and principles of credit and collection discipline, the law trade practices, habits and idiosyncrasies of debtor. Collection, as all collection practitioners know, is really a science and an art.

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FORCES OF COLLECTION

I - Salesmen

• A sale is never a sale unless collected;

• Sales commissions must be paid only on collected sales within the credit term;

• Sanction and penalty for uncollected sales beyond the credit term;

• Incentive for efficient collection of credit, sales within the credit term

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II- THE HOUSE COLLECTORS

Matters to Consider:

• Collection area knowledge and familiarity;

• Population of number of customers;

• Transportation facilities;

• Habits, practices, idiosyncrasies of the collection area.

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Attributes to Look for in Collectors:

Integrity, industriousness, resourcefulness, initiative, tenacity, perseverance

Good grooming, neatness

Happy disposition, adaptability to situations

Working knowledge, skills in arithmetic

Businesslike, tactful, courteous, must have practical judgment specially in dealing with people-debtors

Time consciousness and management

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Collectors’ Contributions to Overall Marketing-Sales Goal

• Assist in bringing in more good collected sales

• Contributes to low delinquency

• Contributes to good liquidity

Controls over Collectors:

• Surprise audit of collectors’ receipts, reports;

• Field audit;

• Rotation of collectors from the collection area they are assigned unless there is a good reason not to

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• Things to look for in an attorney:

Education, training, experience;

Personality, positive character, attributes

References – clientele, adversaries in practice

III- ATTORNEYS (LEGAL COUNSELS)

The time and advice of an attorney are his stock in trade

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Things to provide for:

• Agreement to avail of attorney’s services:

Scope of service – actual / contingent expenses

Remuneration package

Expenses, allowances

Time and payment of pecuniary benefit

Control over amicable & compromise efforts

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Things to look for:

Length of service

People behind the company

Finances

Manpower complements

Clientele, references

Areas of operation

IV- COLLECTION AGENCIES

Things to provide for:

• Scope of services agreement – contingency or per case

• Rates of fees and taxes and time of payment

• Reimbursable expenses

• Withdrawal or Termination Mechanisms

• Confidentiality Clauses

• Others

V- GOVERNMENT

Accounts for write-off must be covered by an affidavit of the collection company or the attorney who conducted the collection efforts out of or through court narrating the collection efforts undertaken as well as any checking on debtor’s properties - short of going to court to collect.

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Tools and Aids in Collecting

1) Notice Reminder

2) Letters

3) Statement of Account

4) Third Party Letter

5) Cables/Telegrams/E-Mails

6) Telephone

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Delinquent Accounts Management

“It’s better that you should not vow than that you should vow and not pay”

Ecclesiasticus 5:5

Elements of Delinquent Accounts

• Cause

• Cure

• Collection Efforts

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1. Delinquency ties-up working capital;

2. It disrupts and complicates business operations;

3. It reduces profit targets;

4. It slows down growth;

5. It causes personal and business failure;

6. It prevents the build-up of reserves for seasonal or long-term demands;

7. The creditor (if not a bank or a financial institution) becomes the debtor's unwitting banker - generally interest-free.

Effects of Delinquency In Receivables

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Causes of Delinquency in Receivables:

1. Internal Causes:

a. Absence or insufficiency of a credit report;

b. Absence of proper documents or simply the failure to register the debt documents in applicable cases;

c. Poor or faulty accounting system;

d. Unsystematic collection efforts;

e. Family, business or other social relationships between the creditor and debtor;

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2. External Causes:

a. Over-obligation on the part of the debtor or getting into debt regardless of capacity to pay;

b. Oversight (witting or unwitting);

c. Bad paying habits and practices;

d. Indolence (most debtors are too lazy to go and pay their creditors);

e. Personal or business reverses or misfortunes;

f. Dissatisfaction, whether founded or unfounded;

g. Habits, practices and idiosyncrasies of the debtor.

h. Force majeure, fortuitous events;

i. New laws

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General Types of Debtors

1. Up-to –Date (DOG)

2. Occasional Delinquent (Monkey)

3. Habitual Delinquent (Lizard, Turtle)

4. Changed Circumstance Delinquent (Chameleon)

5. Premeditated Delinquent (Crocodile)

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Categories of Debtor’s Defenses

1. Offensive/Aggressive - uses offense as defense

2. Denial / Evasion

3. Defiance

4. Plea For Sympathy & Compassion

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KINDS OF DELINQUENT DEBTORS

1. Negligent2. Honest but confused3. Can’t be bothered4. Seasonal delinquent5. Honest late payer6. Chronically slow7. Wittingly late8. Credit stretcher9. Habitual discounter10. Tight rope walker – debtor11. Braggart (mayabang)12. Vanishing debtor (Houdini)

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2. Persuasion “artful intimidation" - It must be borne in mind that persuasion, to be effective and acceptable, must be done with firmness and in the “friendliest “atmosphere possible

3. Problem Solving Assistance - Your success or failure in this aspect of collection problem will have an impact on your long term relationship with the debtor. You must not only be a good creditor in good times only but in bad times as well.

4. Coercion - Coercion must be applied only when really needed. Any form of coercion must be valid and legal. When coercion is decided upon, apply it promptly and to its full extent

BASIC COLLECTION APPROACHES1. Education - at the onset of the creditor-debtor

relationship it is always practical and good collection management technique to indoctrinate the debtor about the credit and collection policies and procedures of the creditor.

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Stages of Collection Efforts

StageCollection Tools

UsedDebtor(s) Involved

1. Impersonal Effort

Statement of AccountStatement inserts/stickers

Those expecting noticeHonest debtor who overlooked payables

Notes on statement fromletter reminderThese collection tools are used generally afterexpiration of credit term

Temporarily financiallyembarrassedCareless, procrastinatingdebtor

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2. Impersonal Appeals

From letters appealing to:a. “Anything wrong or anything we can do?” tone or “Tell your us story” approach

Honestly overlooked payables

b. Pride in -credit standing / reputation; sense of fairness

Temporarily, financiallyembarrassed

c. Replies from this debtor are either by telephone, cables/ telegrams, specialletters, third party reply

Bought/loaned too much Accident or misfortune

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3. Personalized Efforts

Personal Collection(Collector)

Overbought / loaned Debtor who may eventually become delinquent / insolvent

Telephone CallsPersonal Interview

Accident / misfortuneFraud

Personal letter to:

No intention of paying debtor, employer/company, officerDisputed Account

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4.Coercive or Legal Efforts

Repayment / RestructuringAgreement

Overbought/loanedDebtor who delinquent / insolvent

Assignment/ collateralizing, securing debt replevinproceedings

Accident/misfortune

Foreclosure or Nointention to pay

Fraud

Legal action through anAttorney and/or collectionAgency

Disputed Account

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Practical Ways To Have Better Liquidity/Profits In Collection

3)Prudent Write-off/Bad Accounts Mitigate Tax Liability

4)Collection/Sales Incentive Program

5)Counseling

1)Factor/Discount Accounts

a)Credit Card

2)Leverage Collection/Payment Thru

a)Discount

b)Rebates

c)Penalty

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10 Rules to Collect & Get PaidI. Those Who Want to Get Paid, Must Insist on

Payment-On Time.

To be able to get paid, endeavor to be positively serious in the following aspects of your receivable administration.

Having positive policies and procedures that will keep you make cost effective efficient credit decision and action.

It is people who collect, not tools, machines or papers. Make it a policy to train yourself, your people in the science and arts of no-nonsense collection management. Many creditmen do not really know have to collect. It’s trial and error method of collecting.

Educate and communicate with your debtors for them to understand your credit and collection policies and procedures.

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II. Use Your Aging Schedule Positively And Aggressively

III. Always Be a Good Creditor in Good or Bad Times.

IV. Stand your Ground

V. Don’t Hesitate, Enforce Your Credit

VI. Never Threaten, Unless You Mean and Do Your Threat

VII.Have a Team

VIII.Get Assistance Soonest

IX. Act Decisively to Collect Legally

X. Collecting Something is Better than Nothing

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Operating troubles;

Lack of operating success as reflected in continuing operating losses; poor control over operation such as:

Restructuring / liquidation process; Slowdown of payments to current creditors; Failure to pay dividends; Declining share of market Down-grading of credit rating; Loan / bond interest or principal payment defaults; Overdrawn bank accounts; Illiquidity

Tell-Tale Signs of Financial Dangers in Debtor/Company Under Stress

Financing difficulties, problems in meeting financial obligations;

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Financial difficulties do not happen overnight. It is always preceded by months or years of negligence and cracks in the foundation of the company.

Patterns of this worrisome condition existing over a long period of time should and must expeditiously be investigated and attended to, promptly.

Financial Danger Signals to Watch For

Weak Internal Controls

Some of this operational activities are:

Delayed submission or frequent adjustments in the financial reports;

Cash disbursements are not disbursed by one who does not maintain the financial records;

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Artificial low inventory;

The audit and compensation committees are not composed of qualified members (outsiders);

Shortage of disposable free cash. It’s important to determine the source of cash for a company.

Does cash come from:

Operations

Borrowings

Credit stretching

Other unconventional sources

Generally accepted accounting / auditing standards/ practices are frequently bent or not followed;

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Poor organization structure;

Insufficient checks and balances.

The directors, auditors, attorneys, consultants must be called upon to provoke, challenge, critique and rationalize important business or company issues to prevent / avoid risk problems;

Susceptibility to extraneous factors:

Dependence on one or two product lines, customer is a sign of instability

Reliance or changes in politics, government policies, regulations make one vulnerable.

Extra-ordinary or non-recurring asset disposal;

If there is insufficient cash to pay current payables, there exists a problem.

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The indication of poor organizational structure are;

No continuity of succession plan;

Reliance and dependence on one or two individuals in the organization;

Distraction from outside non-core activities;

Excessive overhead at the top management;

Under/overpaid staff in relation with industry’s average/standards;

Unindexed compensation package in relation with performance;

Excessive perks;

Irrational compensation or marketing policies that stresses in short term than long term results or gains;

Uneven revenue growth

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Non-recurring financial transaction

Partake of a single, irregular gains arising from sale of asset, high bad debt write-off, obsolete inventory and failed investments.

Business revenues showed by growing in line with competitors. Losing market share, generating revenue through injudicious extension of credit to marginal accounts triggers this situation. Imbalance between receivable and inventory

Watch out for illogical increase in inventory and account receivables as against slow or poor sales vis-à-vis industry standards.

Ambivalent profitability

Shrinking gross margins, increasing administrative expenses, decreasing revenues, apparent profit brought about by accounting entries, discretionary expenses arbitrarily reduced for research and development, maintenance, promotion and advertising.

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• Cash flow statement

The generally used current ratios, and debt to equity ratios do not reveal the naked financial facts and realities of a company or debtor.

When probing a company’s / debtor’s liquidity or capacity to repay debts, rely on its cash flow statement because it’s more reliable and realistic.

• Inefficient financial structure

Complex, bureaucratic financial, legal structure aggravates a company’s operations. Inefficient and intra-company borrowings, payments of a group of companies; debt conversion to equity due to distressed and illiquid condition

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Factors to Consider in the Management

of Distressed Accounts:1. The prevailing social, economic, political and business conditions in the locality where the company operates. Will there be a recovery? Is there a chance of survival?

2. The perspective of the account - Is there still something to turnaround?

3. To which industry does the debtor belong?

a. Sunrise - Those identified by business and government as having the brightest growth prospects in the market. Among these are electronics, manpower recruitment, textiles, food, leather goods, garment products and wood products.

b. Sunset Industries - Generally those that supply the country's traditional exports (mining, logging, sugar, copra and others).

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5. Accurate reporting of costs - The distressed condition of business sometimes is generally caused by inaccurate reporting of costs.

6. Inflation hedges - Does the company have physical assets that it can fall back on in times of distress?

7. Productivity - Economists agree that the best antidote to inflation and recession is the ability to produce more efficiently and economically.

4. Liquidity prospects of the debtor - What effective plans does the debtor have to improve his liquidity?

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9. The quality and reputation of a company's top management - Creditors are inclined to look favorably on request for aid from companies whose top management is widely respected for their integrity, credibility and trustworthiness.

10.Connections - How many distressed companies in the 70s and 80s were there that no clear thinking creditor would have touched them even with a ten-foot pole were it not for those companies' “powerful" connections'?

8. Assets - There are many instances of distressed companies warding - off moves by creditors to declare them bankrupt due to the availability of worthwhile assets that creditors can depend upon.

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Major Causes of Distressed Accounts

1. Borrowing too much in relation with actual capital requirements - Negligence, lack of government policies and controls, the greed of owners are important reasons for corporate failures.

2. Hasty expansion - Too often, borrowers get so carried away by their initial success in their chosen line of business that they convince themselves that they can also succeed in business they know nothing substantially about.

3. Lack of professionalism, nepotism and cronyism - Mixing business with family and friends is a mixture that is bound to achieve only one thing - conflict and failure.

4. Lack of adequate controls - Many companies have folded up due to owner - initiated fraud.

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6. Lack of integrity or character of the people who own or manage the company.

7. Being in the wrong industry at the wrong time - It helps if a business belongs to one of the "sunrise industries." Opening a business in a sunset industry limits growth and will limit profitability no matter how dedicated and hardworking its management and employees are.

8. Change in the nature of the business - This may be caused by law, force majeure or by the unstudied desire of the owners.

5. Over-confidence in "connections" - A powerful connection in government or in business cannot guarantee success.

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9. Poor financial planning - This usually means:

a. Inability of management to understand how capital intensive are the company's account receivables, capital goods and assets, particularly in inflation-hit operations.

b. Failure to understand the effects of high short-term interest rates on declining profits.

c. Using high-cost money on fast-maturing long-term debts aggravated by poorly planned repayment programs.

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10.Other causes of distressed accounts:

a. Complicated and bureaucratic corporate structure.

b. Entering into substantial long-term contracts with customers, suppliers and lessors without proper contractual safeguards for the company.

c. Negligence or the non-enforcement of collection and payment programs; and, too much reliance on fast depreciating or liquid collateral.

d. No fall-back or crisis support, particularly in debt-servicing and in operations.

e. An eccentric management

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FINANCIAL MANAGEMENT CRITICAL AREASIN A DISTRESSED ENVIRONMENT

CRITICAL AREAS CRISIS STAGE STABILIZATION TURN-AROUND PERIOD STAGE

1. CASH PLUG ALL TRIM DOWN DELIBERATELYFLOW CASH FLOW LOOSE EARMARK

OUTLETS AND UNNECESSARY ANY SURPLUS FIND OUT PAYMENTS TO TO PROMISING WHERE YOU INCREASE GROWTH STAND THEN LIQUIDITY. AREAS. IMPOSE UNILA- TERAL CONTROLS

TO GET TO A POSITIVE CASH FLOW.

2. PROFITA- ADOPT DRASTIC CONTINUE ONLY DETERMINEBILITY COST REDUCTION THOSE OPERA- POSSIBLE

IN AREAS THAT TIONS W/C WILL TRADE-OFFS OF DO NOT CONTRI- GIVE OR CONTRI- SOME SHORT BUTE TO A BUTE TO A TERM TARGETS POSITIVE CASH REASONABLE FOR LONG FLOW. POSITIVE RESULT. TERM OBJECTIVES

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3. CREDIT MINIMIZE OR EXERT AND INTERNALMANAGEMENT AVOID GETTING ENDEAVOR TO SOURCES OF

INTO DEBT UNLESS REPROGRAM FINANCING NECESSARY AND DEBTS TO GET TO CONSERVE IF NEEDED GET EITHER SHORT ANY AVAILABLE INTERIM FINAN- OR LONG TERM AND ACCUMU- CING INSTEAD. ADVANTAGE LATED CASH.

4. WORKING AVOID PAYING CURTAIL CASH INCULCATE &CAPITAL IF YOU CAN; STRETCH OUT OF LOOSE MAINTAIN TIGHT

YOUR CREDITS SYSTEM. FINANCIAL TO THE MOST DISCIPLINE. TOLERABLE POINT. RESTRICT & COLLECT RECEIVABLES, COSTS & INVENTORIES.

5. CAPITAL AVOID UNNECESARY BE PRUDENT, REASONABLYASSET ACQUISITION DISCREET AND ADD FOR

ACQUISITION EXCEPT THOSE RELY ON STRATEGIC NEEDED BY BASIC INTRINSIC GROWTH BUSINESS SOURCES. CONSIDERATIONS

CRITICAL AREAS CRISIS STAGE STABILIZATION TURN-AROUND PERIOD STAGE

2.Definition of Terms:

a.Plaintiff – the party who initiated a small claim action; includes a defendant who filed a counterclaim against the plaintiff.

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Rules of Procedure for Small Money Claims

I. Scope:

Rules of procedure in actions before municipal/city courts.

1. Value of Claim:

Not more than Php100,000.00 pesos exclusive of interest.

f. Good course – circumstances sufficient to justify the requested or order or other action, as determined by the judge.

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b. Defendant – the party against whom the plaintiff has filed a small claim action. It includes a plaintiff has filed whom a defendant has filed a claim or person who replies to the claim.

c. Person – is an individual, corporation, partnership, limited partnership, association or other juridical entity endowed with personality by law.

d. Individual – is a natural person.

e. Motion – a party’s request written or oral, to the court for an order or other action. It shall include an informal written request to the court such as a letter.

4. The claim or Demand may be-

a. Money owed by reason of a lease, loan, services, sale or contract of mortgage;

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g. Affidavit – a written statement or declaration of facts that are sworn or affirmed to the true.

3. Applicability:

a. Applies to purely civil case in nature where the claim or relief prayed for by the plaintiff is solely for payment or reimbursement of sum of money; or

b. The civil aspect of criminal action, either filed before the inclusion of the criminal action , or reserved upon the filing of the criminal action in court, pursuant to Rule III of the Revised Rules of Criminal Procedures.

II. How is small claim commence-

1. A small claim is commenced upon the filing of a verified statement (affidavit) of claim (Form 1-SCC) in duplicate accompanied by a certification of non-forum shopping) Form 1-A-SCC and,

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b. For money claims/demands arising from either

Fault or negligence

Quasi-contract or

Contract

c. Enforcement of a barangay amicable settlement or an arbitration award involving ac money claim (Sec. 417 R.A. 7160 – Local Government Code).

2. Duly certified copies of the actionable document (or evidence of the claim);

3. Affidavits of witnesses and other evidence to support the claim;

4. No evidence is allowed during the hearing which were not attached to or submitted together with the claim, unless good reason is shown for its admission as additional evidence.

No formal pleading, other than the statement of claim prescribed under this rule is necessary to initiate a small claim.

74

5.Consolidation Claims- plaintiff may join in a single statement of claim one or more small claims against a defendant, provided that the total amount claimed, exclusive of interest and costs, does not exceed Php100,000.00.

a.Affidavits – the affidavit submitted under this rule shall state only facts of direct personal knowledge of the affiants which are admissible in evidence;

Violation of this rule shall subject the party and the counsel who assisted in the preparation of the affidavits, if any, to appropriate disciplinary action. The inadmissible affidavit(s) or portion shall be expunged from the record. 75

6. Payment of Filing Fees:

a. Plaintiff shall pay the docket and other legal fees prescribed under Rule 141 of the Rules of Court, unless allowed to litigate as an indigent.

b. An indigent litigation must accomplished form 6 SCC, and referred with executive judge for immediate action in court of multi-sala courts or to the presiding judge of the court hearing the case. If the motion is granted, the case shall be raffled off-or assigned to a court designated to hear the case.

c. If motion to litigate as indigent is denied, the plaintiff has five (5) days within which to pay the docket fees, otherwise, the case is dismissed without prejudice.

76

7. Dismissal of the Claim – a small claim maybe dismissed outright if the evidence by itself does not proved the claim such as those reasons provided in dismissing a civil action.

Rule 16 (Rules of Court)

Grounds for Motion To Dismiss for cases more than Php100,000.00 under regular courts.

1) Court has no jurisdiction over the person of the defendant or over the subject of the action or suit;

77

In no case shall a party, even if indigent litigation be exempt from paying the Php1,000.00 fee for service of summons and processes of the court.

2) Court has no jurisdiction over the nature of the action or suit;

3) Venue is wrong;

4) Plaintiff has no legal capacity to sue;

5) There is another action pending between the same parties for the same cause;

6) Cause of action is barred by a prior judgment or by statute of limitation;

7) Complaint state no cause of action;

8) The claim or demand set forth in the plaintiff’s pleading has been paid, waived, abandoned or otherwise extinguished.

78

8. Summons and Notice of Hearing

a. If no ground for dismissal is found, the court shall issue summons (Form 2 –SCC) on the day of receipt of the statement of claim, directing defendant to submit a verified response.

79

9) The claim on which the action or suit is founded is unenforceable, covered by the statute of frauds.

10)The suite is between members of the same family and no earnest efforts towards a compromise have been made.

b. A notice to both parties (Form 4-SCC) to appear before the court an a specific date, time of hearing with warning for unjustified postponement.

c. The summons and notice to be served on the defendant shall be accompanied by a copy of the statement of claims and documents submitted by the plaintiff, and a copy of the response (Form 3-SCC) to be accomplished by the defendant.

d. The notice shall contain an express prohibition against the filing of a motion to dismiss or any other motion under Rule 14 of this rule. 80

9. Response

a. Defendant shall file with the court and serve upon plaintiff a duly accomplished, verified response within a non-extendible period of ten (10) days from receipt of summons.

b. The response shall be accompanied by certified photocopies of documents, as well as affidavits of witnesses and other evidences in support thereof.

c. No evidence shall be allowed during the hearing which was not attached to or submitted together with the Response, unless good course is shown for the admission of additional evidence.

81

10.Effect of Failure to File Response- failure of defendant to file a timely Response the court shall render judgment as maybe warranted by the facts alleged in the statement of claim limited to the what is prayed for without prejudice at the discretion of the court to reduce the amount claim for being excessive or unconscionable.

11.Counterclaim Within the Coverage of the Rule

a. If at the time the action is commenced, defendant possesses a claim against the plaintiff that;

a-1- is within the coverage of this Rule; exclusive of interest and costs;

a-2- Arises out of the same transaction or event that is the subject matter of plaintiff’s claim.

82

a-3 – Does not require for its adjudication the jointly of third parties.

a-4 – Is not the subject of another pending action the claim shall be filed as a counterclaim in the Response otherwise, the defendant shall be barred from suit on the counterclaims.

a-5 – Defendant may also elect to file a counterclaim against the plaintiff that does not arise out of the same transaction or occurrence and nature thereof are within the coverage of this Rule and the prescribed docket and other legal fees are paid.

12. Prohibited pleadings and motions:

a. Motion to dismiss except on the ground of lack of jurisdiction.

83

b. Motion for Bill of particular.

c. Motion for new trial or for reconsideration of a judgment or for reopening of trial.

d. Petition for relief from judgment.

e. Motion for extrusion of time to file pleadings, affidavit or any other paper.

f. Memoranda.

g. Petition for certiorari, mandamus, or prohibition agent, any interlocutory order issued by the court.

h. Motion to declare defendant in default.

i. Dilatory motion for postponement. 84

j. Reply.

k. Third party complaints; and

l. Intervention.

13.Availability of Forms; Assistance of Court Personnel- The clerk of court or other court personnel shall provide such assistance as maybe requested by the parties as the availability of forms and other information about the coverage, requirements and procedure for small claims cases.

14.Appearance –

a. Parties shall appear at the designated date, time of hearing personally or;

85

b. Through a representative duly authorized under a special power of attorney (Form 5 –SCC) to enter into an amicable settlement, to submit to mediation, and to enter into stipulations or admissions of facts and of documentary exhibits;

c. An attorney for either party is prohibited to represent any of the parties unless the attorney is the plaintiff or defendant himself/herself;

d. If the court determine that a party cannot properly present his/her claims or defense and needs assistance, the court may in its discretion, allow another individual who is not an attorney to assist that party upon his/her consent.

86

15. Non-Appearance of Parties –

a. Failure of the plaintiff to appear shall a cause for the dismissal of the claim without prejudice.

b. The defendant who appears shall be entitled to judgment on a permissive counter-claim.

c. Failure of the defendant to appear shall have the same effect as a failure to file a response under Sec. 12 of this rule.

d. This shall not apply where one of two or more defendants who are sued under a common cause of action and pleaded a common defense appears at the hearing.

87

16.Postponement – Upon proof of the physical inability of the party to attend an scheduled date and time only one postponement is allowed the parties.

17. Reading of the nature, purpose and rules of procedure of small claim.

18.Judicial Dispute Resolution(JDR)

a. The judge shall conduct JDR through mediation, conciliation, early neutral evaluation or any other mode of JRD

b. Any settlement (Form 7-SCC) or resolution (Form 8-SCC) of the dispute shall be reduced into writing, signed by the parties and submitted to the court for approval (Form 12-SCC).

88

e. Failure of both parties to appear shall cause of dismissal of the case with prejudice of both the claim and counterclaim.

c. If JDR fails and the parties agree in writing (Form 10-SCC) that the hearing of the case shall be presided by the judge who conducted the JDR, the hearing shall proceed in formally expeditiously and terminated within one (1) day.

d. Absent such agreement :

d-1 – In case of a multi-sala court, the case shall on the same day, be transferred (Form 11-SCC) to the office of the Clerk of Court for immediate referred by the Executive judge to the pairing judge for hearing and decision within five (5) working days from referral and;

d-2 – In case of a single sala court. The pairing judge shall hear and decide the case in the court of origin within five (5) working days from referred by the JDR judge.

89

19.Decision:

a. After the hearing, the court shall render its decision and the same day based on the facts established by the evidence (Form 13-SCC)

b. The decision shall immediately be entered by the court dockets and a copy thereof served on the parties.

20.Execution – if the decision is in favor of the plaintiff execution shall be issued upon motion (Form 9-SCC)

90

Guidelines in Auction Sale of Real and Personal Properties

21.Rules of Procedures Application – The Rules of Civil Procedure shall only apply in supplementation as they are not inconsistent with this Rule.

91

FORM 1-SCC

REPUBLIC OF THE PHILIPPINES

______________________________

______________________________

____________________,

Plaintiff,

vs. Civil Case No. _____________

For : _____________________

______________________,

Defendant.

X - - - - - - - - - - - - - - - - - - - - x92

STATEMENT OF CLAIM

Plaintiff respectfully alleges:

1. The personal circumstances of the parties re as follows:

NAME OF PLAINTIFF/S SEX AGE CIVIL STATUS

____________________ ____ ____ _____________

NAME OF REPRESENTATIVE:____________________

ADDRESS ZIP CODE

_____________________________________ ___________

NAME OF DEFENDANT/S SEX AGE CIVIL STATUS

________________________ ____ ____ _____________

93

INDIVIDUAL __ CORPORATION_ PARTNERSHIP _

SOLE PROPRIETORSHIP __

NAME OF REPRESENTATIVE ____________________

ADDRESS ZIP CODE

_____________________________________ ___________

2. Plaintiff is suing defendant for:

CAUSE OF ACTION

_____ Collection of Sum of Money

_____ Damages

_____ Civil Aspect of Criminal Case

_____ Enforcement of Barangay Agreement

94

3. Plaintiff’s cause of action arose from and is evidenced by:

ACTIONABLE DOCUMENT/S AFFIDAVIT/S

_____ Promissory Note/Undertaking How Many ____

_____ Contract/Agreement

_____ Receipt

_____ Others

4. The principal obligation of defendant/s amounting to Php___________ became due and demandable on ___________. Interest at the rate of ____% per annum/per month accrued on the principal sum due from such date of default.

95

5. Despite repeated demands by plaintiff, the latest of which was on ______________, defendant has failed to pay the obligation.

6. _____ (a) This claim has been referred to the appropriate barangay authorities but no settlement was reached between the parties. A Certificate to File Action was issued to the plaintiff, the original of which is attached hereto.

_____ (b) The parties are not covered by the barangay mandatory conciliation process under the local Government Code of the Philippines.

96

Prayer

WHEREFORE, plaintiff respectfully prays for judgment to be rendered ordering defendant to pay plaintiff the amount of Php_________________ with interest at the rate of ____% per annum/per month, from ______________, until fully paid.

_______________________; __________ 20 _____.

PLACE, WHERE FILED

PLAINTIFF

97

FORM 1-SCC


_____________________________

_____________________________

_________________________

Plaintiff,

vs Civil Case No. _____________

For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x

98

STATEMENT OF CLAIM

Plaintiff respectfully alleges:

1. The personal circumstances of the parties are as follows:

NAME OF PLAINTIFF/S SEX AGE CIVIL STATUS

____________________ _____ _____ _____________

INDIVIDUAL ____ CORPORATION ____ PARTNERSHIP ____

SOLE PROPRIETORSHIP ______

NAME OF REPRESENTATIVE: ___________________________

ADDRESS ZIP CODE

__________________________________ ___________

99

NAME OF DEFENDANTS//S SEX AGE CIVIL STATUS

________________________ ____ ____ _____________

INDIVIDUAL ___ CORPORATION ___ PARTNERSHIP___

SOLE PROPRIETORSHIP ___

NAME OF REPRESENTATIVE: _______________________

ADDRESS ZIP CODE

____________________________________ ____________

2. Plaintiff is suing defendant for:

CAUSE OF ACTION

____ Collection of Sum of Money

____ Damages

100

_____ Civil aspect of Criminal Case

_____ Enforcement of Barangay Agreement

3. Plaintiff’s cause of action arose from and in evidenced by:

ACTIONABLE DOCUMENT/S AFFIDAVIT/S

_____ Promissory Note/Undertaking How many:____

_____ Contract Agreement

_____ Receipt

_____ Others.

4. The principal obligation of defendant/s amounting to Php______ became due and demandable on__________. Interest at the rate of _____% per annum/per month accrued on the principal sum due from such date of default.

101

5. Despite repeated demands by plaintiff, the latest of which was on ______________________, defendant has failed to pay the obligation.

6. _____ (a) This claim has been referred to the appropriate barangay authorities but no settlement was reached between the parties. A Certificate to File Action was issued to the plaintiff, the original of which is attached hereto.

_____ (b) The parties are not covered by the barangay mandatory conciliation process under the Local Government Code of the Philippines.

102

Prayer

WHEREFORE, plaintiff respectfully prays for judgment to be rendered ordering defendant to pay plaintiff the amount of Php______________ with interest at the rate of _____% per annum/per month, from ____________, until fully paid.

_____________________; ____________ 20___.

PLACE WHERE FILED

PLAINTIFF

103

FORM 1-A-SCC

VERIFICATION AND CERTIFICATION OF NON-FORUM SHOPPING

I, __________________________________, of legal age,

(NAME)

_________________________________, and a resident of __________________________________________.

After having been duly sworn to in accordance with law, hereby, depose and say:

104

1. That I am the ________________ in the above-entitled case and have caused this ______________________ to be prepared; that I read and understood its contents which are true and correct of my own personal knowledge and/or based on authentic records.

2. That I have not commenced any action or proceeding involving the same issue in the Supreme Court, the Court of Appeals or any other tribunal or agency; that to the best of my knowledge, no such action or proceeding is pending in the Supreme Court, the Court of Appeals or any other tribunal or agency, and that, if I should learn thereafter that a similar action or proceeding has been filed or is pending before these courts or tribunal or agency, I undertake to report that fact to the Court within five (5) days therefrom.

105

IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of______________________, 20___.

_______________

Affiant

SUBSCRIBED AND SWORN to before me this _____ day of _________________, 20___.

NOTARY PUBLIC

106

FORM 2-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 107

SUMMONS

To : _______________

________________

________________

GREETINGS:

You are hereby required, within ten (10) days from receipt of this Summons, to file with this Court and served on plaintiff, your verified Response to the attached Statement of Claim. The form of the required Response is attached hereto.

You are required to submit with your Response copies of documents as well as affidavits of any witness to stand as your evidence in this case. You must present the original documents on the day of the hearing.

108

A motion to dismiss is prohibited and shall not be entertained.

Your failure to respond within the 10 day period will authorize the Court to render judgment based solely on the Statement of Claim.

Witness my hand under the seal of this Court, this _____ day of ________________, 20___ at _______________, Philippines.

BRANCH CLERK OF COURT

109

FORM 3-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 110

RESPONSE

Defendant/s respectfully allege/s:

1. Defendant admits all the allegations in paragraph/s ______ of the Statement of Claim.

2. Defendant specifically denies all the allegations in paragraphs ______of the Statement of Claim.

3. Defendant opposes the grant of the prayer in the Statement of Claim for the following reasons, as supported by the attached documents and affidavits: (enumerate defenses)

4. As the Statement of Claim is baseless, defendant is entitled to the following counterclaims:

111

______ Actual Damages of Php __________________

______ Moral Damages of Php __________________

______ Exemplary Damages of Php________________

______ Cost of suit

Prayer

WHEREFORE, defendant respectfully prays for judgment to be rendered dismissing the Statement of Claim, and granting the counterclaims, ordering plaintiff to pay defendant the following sums:

112

_____ Actual Damages of Php _________________

_____ Moral Damages of Php __________________

_____Exemplary Damages of Php ________________

_____ Costs of Suit.

DEFENDANT

(VERIFICATION AND CERTIFICATION

ON NON-FORUM SHOPPING, if with permissive counterclaim)

113

FORM 4-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 114

NOTICE OF HEARING

Once issues and joined upon the filing of the defendant’s Response, this case will be called for Judicial Dispute Resolution (JDR) and hearing before the Presiding Judge of this Court on _____________ at ________________.

Failure of the plaintiff to appear at the JDR and hearing shall cause the dismissal of the Statement of Claim, and the defendant who appears shall be entitled to a judgment on his counterclaim. On the other hand, failure of the defendant to appear at the JDR and hearing shall cause the Court to render judgment based solely on the Statement of Claim.

115

A party may not be represented by a lawyer, but may authorize any other representative to appear in his behalf and participate in all the proceedings as if the party represented were present. For this purpose, the required authority should be evidenced by accomplishing the attached Form 5-SCC (Special Power of Attorney).

WITNESS the HON. __________________, Presiding Judge of this Court, this _____ day of ______________, 20___ at _________________, Philippines.

BRANCH CLERK OF COURT

116

FORM 5-SCC

SPECIAL POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

I, ___________________, of legal age, single/married, with residence at _________________________ do hereby appoint, name and constitute ___________________________, likewise of legal age, single/married, with resident at ________________________, as my true and legal representative to act for and in my name and stead and to represents me during the hearing of Civil Case No. ________________, to enter into amicable settlement, to submit to alternative modes of dispute resolution and to make admissions, or stipulations of facts and documents with further consultation from me.

117

I hereby grand my representative full power and authority to execute and perform every act necessary to render effective the power to compromise as thought I myself have so performed it and hereby approving all that he may do by virtue of these presents.

In witness whereof, I hereunto set my hand this _____ day of ________________, 20____ , at _____________.

_________________

Principal

_________________

Agent

118

Witnesses: _____________________________________________

(ACKNOWLEDGMENT)

119

FORM 6-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 120

MOTION TO PLEAD AS INDIGENT

_____________________, unto this Honorable Court, respectfully alleges that:

1. I am a resident of _______________________;

2. My gross income and that of my immediate family does not exceed _________________;

3. I do not own real property with an assessed value of more than (amount as provided in the Revised Rules of Court, as amended) as shown by the attached Certification issued by the Office of the City/Municipal Assessor and the City/Municipal Treasurer’s Office.

121

4. Due to financial constraint, I cannot afford to pay for the expenses of a court litigation as I do not have enough funds for food, shelter and other basis necessities.

5. Should the court render judgment in my favor, the amount of the docket and other legal fees which I was exempted from paying shall be a lien on the judgment, unless the court orders otherwise.

WHEREFORE, premises considered, it is respectfully prayed that I be exempted from the payment of docket and other legal fees as indigent pursuant to Section 21, Rule 3 in relation to Section 18, Rule 141 of the Revised Rules of Court.

122

Other reliefs just and equitable under the premises are likewise prayed for.

PLAINTIFF

123

FORM 7-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 124

MOTION FOR APPROVAL OF COMPROMISE AGREEMENT

The parties respectfully allege that:

1. Plaintiff filed this claim against defendant for:

_____________ collection of sum of money

_____________ damages

_____________ civil aspect of criminal case

_____________ enforcement of barangay agreement

_____________ recovery of personal property

2. The parties have come to an amicable settlement and have executed a compromise agreement with the following terms and conditions.

125

(copy terms and condition here)

3. The parties agree that the approval of this agreement by the Court shall put an end o this litigation, except for purposes of execution in case of default.

WHEREFORE, premises considered, the parties respectfully pray that the court approve this agreement and render judgment on the basis thereof.

_______________________, 20 _____.

_______________________ ____________________

Plaintiff Defendant

126

FORM 8-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 127

JOINT MOTION

Plaintiff and defendant, unto this Honorable Court, respectfully allege that:

1. Plaintiff and defendant have mutually and voluntarily settled their claim and counterclaim to the entire satisfaction of each other; and

2. The parties no longer have a cause of action against each other.

WHEREFORE, premises considered, plaintiff and defendant respectfully pray that the plaintiff’s statement of claim and defendant’s counterclaim incorporated in his response be dismissed.

128

Other reliefs just and equitable under the premises are likewise prayed for:

__________________________, 20___.

___________________________ __________________

Plaintiff Defendant

To the Branch Clerk of Court:

Please submit the foregoing motion for the consideration of the Court without hearing and further argument from the parties.

___________________________ __________________

Plaintiff Defendant

129

FORM 9-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 130

MOTION FOR EXEUCTION

Plaintiff/Defendant, unto this Honorable Court, respectfully alleges that:

1. On _________________, a judgment was rendered by the court, the dispositive portion of which reads:

2. The judgment is final and unappealable.

3. The defendant/plaintiff has not complied with the judgment.

WHEREFORE, premises considered, it is respectfully prayed that a writ of execution be issued to implement the judgment of the court dated ________________

____________________________, 20 ___.______________________

Plaintiff/Defendant131

NOTICE OF HEARING

NAME OF DEFENDANT

(IF FILED BY PLAINTIFF)

NAME OF PLAINTIFF

(IF FILED BY DEFENDANT)

NAME OF CLERK OF COURT

Please be notified that the undersigned will submit the foregoing motion for the consideration and approval of the Court of _______________ at_____________________, 20___.

___________________

Plaintiff/Defendant132

FORM 10-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 133

Agreement

Having failed to resolve the matter through Judicial Dispute Resolution, plaintiff and defendant hereby agree that Judge ________________________ shall continue with the hearing on the instant matter and hereby waive their right to have a different judge hear the case.

_______________________, 20_____.

_______________________ _____________________

Plaintiff Defendant

134

FORM 11-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 135

ORDER

In view of the failure of judicial dispute resolution and there being no agreement from the parties to let the undersigned continue hearing the instant case, the record of this case is transmitted to the Office of the Clerk of Court for immediate referral by the Executive Judge to the Pairing Judge for hearing and decision pursuant to Section 21 of the rule of Procedure for Small Claims Cases.

SO ORDERED.

_________________________, 20 ____.

________________

Judge

136

FORM 12-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 137

DECISION BASED ON COMPROMISE AGREEMENT

Plaintiff filed this case against defendant ___________________ in the amount of _______________.

Defendant denied plaintiff’s claim on the ground of _____________________ and set up a counterclaim for _______________________.

The parties, however, reached an amicable settlement and submitted to the court a compromise agreement, the terms and conditions of which are as follows:

138

It appearing that the agreement is not contrary to law, morals, good customs, public moral and public policy, and pursuant to Articles 2028 and 2037 of the Civil Code of the Philippines, the same is hereby APPROVED and ADOPTED as the Decision of this Court.

The parties are hereby ordered to faithfully comply with the terms and conditions of the agreement.

________________________, 20___.

__________________

Judge

139

FORM 13-SCC


_____________________________

_____________________________

_________________________

Plaintiff,


For : _____________________

___________________________

Defendant.

X - - - - - - - - - - - - - - - - - - - - - - x 140

Defendant alleges that (state reasons for denial of the claim and other material allegations in the Response including counterclaims, if any).

On (date) both parties appeared during the hearing conducted by (state name of Judge who conducted the JDR. State whether parties appeared personally or through a specially authorized representative).

Considering the failure of the parties to arrive at any settlement of the dispute, this court proceeded with the hearing of the case which was terminated on _______________.

The issue to be resolved by this court is whether ____________________________________________.

141

Plaintiff’s evidence consists of; (state documents of plaintiff, affidavit, submitted, if any , and statements made by plaintiff and witnesses under oath during the hearing).

Defendant’s evidence consists of: (state documents of defendant; affidavits submitted, if any, and statement made by defendant and witnesses under oath during the hearing).

This court finds that the claim of plaintiff (or defendant in a counterclaim) us(state whether meritorious or devoid of merit). Under Article/Section (state the applicable provisions of law) or pursuant to established jurisprudence (cite applicable jurisprudence). In this case, this court found that (state first the factual findings established by the evidence and then the legal conclusions).

142

Wherefore, the (claim/counterclaim) is (granted/denied). The court orders ________________ to pay to ____________________________ the amount of (state the monetary state the monetary award or damagesaward or damages) with interest of () with interest of (if applicable under Civil Code if applicable under Civil Code and/or settled jurisprudenceand/or settled jurisprudence) until fully paid.

SO ORDERED.

(Date of decision.)

143

Signature

President Judge

(or Pairing Judge in the absence

of written agreement of the parties that the case shall be heard by the presiding Judge who conducted the JDR.

Copy furnished:

All parties

Office of the Clerk of Court of _____________

144

145

Practical Suggestions To Improve Profitability in Marginal/Delinquent Accounts

In-House Collection Force

Factoring / Credit cards

Organized Subsidiary To Collect

Network With a Collection Agency

Private Local Financing

146

(All Rights Reserved: No part of this seminar materials may be used, quoted reprinted and the like, without prior written consent and permission from the author, Erdulfo S. Sison, and/or its publisher, Business Assistance, Credit Corp. (BAGCO CREDIT), under penalty of the laws for unauthorized used copying and dissemination.

- END -

June 17, 2009 147

Pilipinas Kong MahalANG BAYAN KO’Y TANGING

IKAW

PILIPINAS KONG MAHAL

ANG PUSO KO AT BUHAY MAN

SA IYO’Y IBIBIGAY,

TUNGKULIN KO’Y GAGAMPANAN,

NA LAGI KANG PAGLINGKURAN,

ANG LAYA MO’Y BABANTAYAN

PILIPINAS KONG MAHAL

imroving profitability through nncc operation

Economy & Finance