Ari G 09 January 2018

Credit card debt of deceased father

My father passed away last year.

There were some bank deposits, some with me as Nominee some held as Joint with me, which I got from him. There are also some credit card outstandings in his name.

I have been given legal advice that since I got my father's property in the form of bank deposits I would have to repay his liabilities.

Now I tried to talk with the banks about waiving the interest on the outstandings.

One bank has informed me that they cannot waive the interest. Moreover they have told me that if I don't pay the entire amount at one go my CIBIL score would be affected.

I am asking for advice on three things.

1.Can I approach the Lok Adalat for a settlement?

2.Can my CIBIL Score be affected if I don't repay the entire amount at one go?

3.What would be the best way to proceed from here?

I am not in a position to repay that much money. That is why I asked the banks to waive the interest and allow me to repay the principal in installments.

The deposits I got from my late father are more in value than the outstandings. The problem is I have no regular job. I have a freelance job online however that is based on employer's goodwill; there is no formal agreement of work. The bank deposits are my only assured source of income.

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8 Replies

R.Ramachandran (Advocate) 09 January 2018

Please indicate whether the balances in the account of your late father - where you are nominee and where you are a joint account holder - are more than the credit card debt or not?

Ari G 09 January 2018

The deposits are greater in value than the outstandings

R.Ramachandran (Advocate) 09 January 2018

Then what is your difficulty in paying off the credit card debt?

Pl. take it nobody will waive the interest - and for what reason?

Please also take it, that if you pay in instalments, bank will first adjust interest amount, and only the balance towards the capital loan repayment. The interest that you will be paying will be much more than the interest that you will be earning on the deposits.

Therefore, instead of wasting time and accumulating further interest, better pay off the debt and be free.

Ari G 09 January 2018

The problem is I do not have a regular job and the bank deposits are the only assured income source for me.

Even if I do have to repay, do I have to repay all at once or can I do in installments?

It seems strange that my CIBIL Score will be affected even if I repay in monthly installments (which is what the bank is claiming); after all, EMI is how credit card debt is normally repaid.

R.Ramachandran (Advocate) 09 January 2018

You can do it in instalments.

If CIBIL score will get affected, so be it. What can you do in the situation? Nothing.

Start repaying in instalments. But beware, the bank will try to adjust the outstanding interest first. Not the principal amount.

Ari G 09 January 2018

Thank you for your prompt replies

I have two more questions

One - can I try to negotiate a settlement via Lok Adalat in this case? I respect your opinion but there is no harm in trying to get some relief and in my position even a Rs 500 relief means 5 days' lunch + dinner.

Two - can the bank keep charging interest on my deceased father's outstanding or will the outstanding become a fixed amount from the day of his death?

R.Ramachandran (Advocate) 09 January 2018

1. Till such time the credit card debt is repaid, interest will keep on adding.

2. You can approach the Bank officer and ask for one time settlement. (That means you may have to pay the entire agreed amount in one go - no instalments will be allowed).

3. You may also try through Lok Adalat - I am not sure about its effectiveness in your case. But Bank officers themselves can be of some help. First try and talk to them.