Can a person be charged with estafa for failing to pay a loan or debt?

[Starmix]

Generally, failure to pay a loan or debt alone is not typically considered estafa or fraud. Estafa usually involves more than just not paying. It requires some form of deceit, misrepresentation, or fraudulent scheme at the time the loan or debt was incurred.

The following is the breakdown of the conditions of estafa:

• Deceit;
• Intent to defraud, and
• Damage or prejudice.

There must be clear evidence that the borrower used deceitful means to obtain the loan, for example, by presenting false documents and lying about their financial situation. There has to be proof that the borrower had no intention of paying back the loan from the start. The lender must have suffered financial damage or prejudice due to the borrower’s deceitful actions.

The following are the breakdown for the conditions when it is not estafa: 1. simple inability to pay, and breach of contract. If the borrower genuinely intended to pay the loan but couldn’t due to financial difficulties, it is usually considered a civil matter, not a criminal one. Failure to comply with loan terms is primarily a breach of contract, which is typically resolved through civil court.

 

[Suba]

Debt cases can not only be brought to the realm of civil law but also to criminal law if they meet the elements of estafa or fraud, such as providing false information/data such as names, ID cards, etc., fraud, not using funds according to the agreement, even though the debtor has the financial ability but does not want to pay the debt.

 

[Starmix]

In case the debtor refused to pay, the case will be brought to court for breaching the contract. It might be amicable depending on the move of the debtor .