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Multiple unsecured loan defaults
2 weeks ago
So my father is retired, but we came to know that he has multiple loans from private agencies like Aditya Birla Capital, Fullerton India(Total amt: 12-13Lakhs) and some amount in 2 credit cards from HDFC and Axis(5Lakhs).
He defaulted on 2 of them already, what is the best way to go about it. We have lived at multiple places and all of them have varying address, but Aditya Birla one had the address of our ancestral home. The recovery agents went and met my father's elder brother(he knows about the situation) who told them he doesn't have any contact with my father. They took pictures of the house and left. What is the best course of action that we can take on the upcoming months, considering he has no income and all the other emis will bounce as well.
A.Dear Client,
In case of unpaid debts, the creditors/banks have a right to take legal action the borrower for recovery of loan amount. In such a situation, you can write an application to the concerned creditors/banks seeking for an extension in the time period for the repayment of loan amount. You are required to repay the entire loan amount and there cannot be any concessions provided on the same. If you default on the repayment, then the bank can seize your property or use the proceeds of your property to claim the loan amount. If required, you can consult an advocate for advice and assistance in the matter.
Hope it helps.
Thank you.
In case of unpaid debts, the creditors/banks have a right to take legal action the borrower for recovery of loan amount. In such a situation, you can write an application to the concerned creditors/banks seeking for an extension in the time period for the repayment of loan amount. You are required to repay the entire loan amount and there cannot be any concessions provided on the same. If you default on the repayment, then the bank can seize your property or use the proceeds of your property to claim the loan amount. If required, you can consult an advocate for advice and assistance in the matter.
Hope it helps.
Thank you.
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A.Dear Client,
Once a borrower fails to repay his debt, the Lenders/FIs initiate a routine course of action for recovery of the loan/debt from the borrower following the provision under the SARFAESI Act and the order of the Debt Recovery Tribunal directing the attachment of the assets of the borrower to write off the balance amount of loan. Even, the legal heirs of a deceased borrower who by the law of inheritance gets the property of the deceased owner are equally liable to meet the debt of the deceased borrower. However, you may negotiate or settle your dues against loans by following the steps like lowering your interest rate, arranging for a reduced interest rate is one of the most common requests a defaulter borrower can make to the Bank, creating or restructuring a repayment plan or extending the tenure of repayment of a loan, looking for debt forgiveness. considering loan consolidation, offering a one-time settlement payment. Following these steps, you may write an application requesting for settlement of dues to the concerned Bank stating why you cannot repay your outstanding dues lying against the loans. Also, write that you want to explore alternative repayment terms. Specify the amount that you can pay, as well as what you expect from the creditor Bank in return. A good starting point for negotiation could be offering around 30% of the amount that you owe. But all your attempts solely depend upon the discretion of the Lenders. But sometimes it's typically done through third parties like debt relief companies, which you may hire to negotiate the settlement matter with the lender on your behalf. With this method, you will make payments to the debt settlement company rather than your creditors/lenders, along with any fees. Debt settlement is an agreement between a lender and a borrower in which the borrower repays a portion of a loan balance and the lender forgives the remainder. You may consider starting the negotiation by offering to pay 25% or 30% of your outstanding balance in return for forgiveness on the rest. But, it may be noted that while there are legitimate debt relief/settlement companies, there are also many scam operations. So, if you're considering one, the Consumer Financial Protection Bureau(CFPB) suggests for contacting your state attorney general's office and local consumer protection agency to ask if they have any consumer complaints on file about that company. Some states require that debt settlement companies be licensed, which may provide some added protection. Although a debt settlement can offload some of your financial crisis, there are also a few potential risks and downsides to consider. First, a debt settlement will affect your credit score. That will make it more difficult for you to get credit or good interest rates in the future. Another potential drawback is that when you settle debt, you could face tax consequences. Finally, when you settle a debt with a credit card company, your account is closed once the settlement is complete. So you could potentially have no credit facility to use a credit card further owing to your poor credit score. Further, a quick counselling session with a certified credit counsellor can help you to discover your options and choose the right path forward to settle the debts/loan with the Bank.
Once a borrower fails to repay his debt, the Lenders/FIs initiate a routine course of action for recovery of the loan/debt from the borrower following the provision under the SARFAESI Act and the order of the Debt Recovery Tribunal directing the attachment of the assets of the borrower to write off the balance amount of loan. Even, the legal heirs of a deceased borrower who by the law of inheritance gets the property of the deceased owner are equally liable to meet the debt of the deceased borrower. However, you may negotiate or settle your dues against loans by following the steps like lowering your interest rate, arranging for a reduced interest rate is one of the most common requests a defaulter borrower can make to the Bank, creating or restructuring a repayment plan or extending the tenure of repayment of a loan, looking for debt forgiveness. considering loan consolidation, offering a one-time settlement payment. Following these steps, you may write an application requesting for settlement of dues to the concerned Bank stating why you cannot repay your outstanding dues lying against the loans. Also, write that you want to explore alternative repayment terms. Specify the amount that you can pay, as well as what you expect from the creditor Bank in return. A good starting point for negotiation could be offering around 30% of the amount that you owe. But all your attempts solely depend upon the discretion of the Lenders. But sometimes it's typically done through third parties like debt relief companies, which you may hire to negotiate the settlement matter with the lender on your behalf. With this method, you will make payments to the debt settlement company rather than your creditors/lenders, along with any fees. Debt settlement is an agreement between a lender and a borrower in which the borrower repays a portion of a loan balance and the lender forgives the remainder. You may consider starting the negotiation by offering to pay 25% or 30% of your outstanding balance in return for forgiveness on the rest. But, it may be noted that while there are legitimate debt relief/settlement companies, there are also many scam operations. So, if you're considering one, the Consumer Financial Protection Bureau(CFPB) suggests for contacting your state attorney general's office and local consumer protection agency to ask if they have any consumer complaints on file about that company. Some states require that debt settlement companies be licensed, which may provide some added protection. Although a debt settlement can offload some of your financial crisis, there are also a few potential risks and downsides to consider. First, a debt settlement will affect your credit score. That will make it more difficult for you to get credit or good interest rates in the future. Another potential drawback is that when you settle debt, you could face tax consequences. Finally, when you settle a debt with a credit card company, your account is closed once the settlement is complete. So you could potentially have no credit facility to use a credit card further owing to your poor credit score. Further, a quick counselling session with a certified credit counsellor can help you to discover your options and choose the right path forward to settle the debts/loan with the Bank.
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