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Vipin S (Proprietor)     23 November 2012

Please advice

We are a family of 5, consisting my wife and my kid, my father, mother and myself; living in a 500 sq.ft  1BHK flat.

The property is in the name of my father who works for a private firm and earns 5000 pm. Myself working in an IT firm and earning 15000 pm (I joined last year only, before that I was into cyber cafe business and had to suffer huge losses due to competiton and I was also stuck into Credit cards dues, due to which my earning was almost nil, though I somehow managed to get rid of the credit card dues). My better half also working in a coaching institute and earning 5000 pm.


The abovesaid property is currently held with a cooperative bank since 2003. The Principal loan amount taken was 3.50 lacs and our EMI is Rs.6125/-. The bank is in liquidation since 2004 and due to various reasons we could not pay the EMI regularly since 2005.

Last year the liquidator of the bank sent our property to the 'Tehsildaar' for auction and we were given a notice to payoff the full amount with interest within a month, the amount was Rs.5.65 lacs as on 31.12.2010


We somehow managed to pay only 75000 that day and promised to pay regular installment as much as we could. Since then I could manage to pay not more than 3000 a month due to other household expenses and other Personal loans of myself.

Now, as of today the said loan amount is at Rs.5.80 lacs and the rate of interest charged by the bank is 16% p.a. We've tried our best to shift the said loan to another bank but no one is ready to give us loan since the property is in the name of my father (60) and due to his low income, instead many of them suggested that he should transfer the property in my name and then I should apply for a fresh loan, to which my father did not agreed upon.

Now my question to the expert(s) is that since the ROI is so huge compared to the market and we are unable to find any other way to pay off this huge amount, shall we sell off the property, pay the bank loan. (The bank has promised that if we payoff in full they will provide 10-20% discount on the current outstanding)

The current market value of the property is around 10-12 lacs and my calculation is that if we sell the property we'll have atleast 4-5 lacs cash in hand which we can put into Fixed Deposit with a bank and rent a similar flat/home so that this huge burden will be off from our head. I somehow managed to convince my family that we shouldn't get stuck more into this dig and get the hell out of here as soon as we can.

I have also worked out some calculation that even If I manage to pay upto 8000 a month it will take not less than 10 years to get rid of the loan. But I don't think the liquidated bank will allow us to do so... Hence my mind is not ready to pay off the loan instead I would like to quit the game.


Valuable suggestions are welcomed...


regards


Vipin



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