Tejeshwar Singh (Business) 06 June 2022

Default in paying loan emi and credit card bills

I have a very good credit rating and CIBIL score, and have a repayment track record of over 25 years. Due to financial duress and business problems since past few years I have been running my home with loans and credit card. All my EMIs and bills are being paid on time however. Now however since the income is also not enough to cover my EMIs, I have got into a debt trap since I had to take new loans to pay the older ones. I am unable to pay any more loans and credit cards, there are 5 loans and 7 credit cards with dues amounting to around 36 lakhs. I have approached the banks and explained my problem, but they all are refusing to accept any EMI rescheduling, reduction, etc. In such case what can I do? If I stop paying my EMIs and credit card bills, can I be taken to court or face jail term? What is the worst that the banks can do. Please advise as I am under a lot of stress and tension. Thank you.

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5 Replies

anubhav Bhatt 06 June 2022

Dear Client, In that case you should go for One Time Settlement with the said Banks or Restructure your loans as per the RBI norms for more clarification you may contact us then I'll elaborate properly.
Advocate Anurag Bhatt
Allahabad High Court
Mobile 📱 9198889990

1 Like

Dr J C Vashista (Advocate) 07 June 2022

Settle the matter with your banker.

G.L.N. Prasad (Retired employee.) 07 June 2022

This is your worry, and when you can not pay even EMI, OTS is ruled out: If I stop paying my EMIs and credit card bills, can I be taken to court or face jail term? What is the worst that the banks can do. Please advise as I am under a lot of stress and tension. Thank you

The bank has to follow the laid down procedure by proceeding legally against you for recovery of the money which includes filing suits and confiscating the assets financed, attaching the property, and if still amount is not paid deliberately with a source to pay but not wilfully playing and not paid the court may order for such jail term.

Above all this, the doors of financial institutions are permanently closed for you and you can not raise any credit in the future and should carry the blot of a defaulter.

A prudent person uses such facilities with caution and has 7 credit cards and several loans per person showing lavish life without planning. Bank can not remain silent as public money is involved and it is in your interest, to sell off the assets and liquidate the borrowings at the earliest. There are no short-cut methods to write off personal loans. The court may not have sympathy also on you.

SIVARAMAPRASAD KAPPAGANTU (Retired Manager) 17 June 2022

You need to pay all your dues of Credit Cards and Loan EMIs. There is no escaping nor there is any shortcut. If the payments are not forthcoming, banks shall proceed further to take over the securities like House (in the case of Housing Loan) Car (in the case of Car) etc. You have to face the court cases and seizure of the properties by the Bank.

P. Venu (Advocate) 18 June 2022

Failure to pay loans, in spite of a court decree, may lead to attachment and sale of your property and also, further worsening of your credit rating. There could be no criminal charge and resultant imprisonment, but the Court could order civil imprisonment for not satisfying the decree in spite of sufficient means.