My friend is deep in debt for a total sum of Php430,000.00 in a loan shark at 10% interest monthly. She is paying an interest of Php43,000.00 monthly and have already paid a total sum of Php1,032,000.00 in interest only for over two years now. She ask her creditor for a favorable settlement for her to be free of the burden of her obligation but it was not granted by her creditor, and the later is demanding the payment of principal and interest in full. Unfortunately she is incapable of paying off the principal, and thus she must continue paying the interest according to their agreement. The agreement is verbal and there are no records kept for both during the availment of loan and the history of its payment.
Is there any legal remedy for the debtor in case the creditor continues to decline the proposal of the later for a favorable settlement of its obligation?
Is there any legal remedy for the creditor to demand payment in full, both principal and interest based on their original agreement? If yes, what are the options of the debtor?
Please enlighten me with this situation.