Default in paying loan EMIs and credit card bills
1 year ago
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.
Any loan/credit taken from a bank has to be returned as that is not your money but the public money. If the money is not returned then the bank will initiate its legal action which includes arbitration, recovery suit, cheque bounce case, complaint case against you.
Secured loans require an asset or collateral as pledge. The collateral can be anything of tangible value such as jewelry, real estate property, and so on. When one fails to pay the EMIs on time, the bank/lender will decide to sell or auction the collateral and send a letter to the borrower regarding the date of sale or auction. However, the borrower has a right to the amount left over after the auction is completed and the required dues have been paid.
The auction can be averted if the borrower decides to settle the dues even after the letter has been sent. Once the bank receives the EMIs due, they will cancel the auction and not sell the collateral.When you fail to pay off the borrowed amount even after a certain period of time, the lender will report your loan account as a non-performing asset (NPA) to the credit bureaus. This will severely affect your credit history and bring down your credit score as well.
In addition to this, you will find it very difficult to get a credit card, personal loan, home loan, or any other kind of loan from any banks or financial institutions in the future. if the borrower is deemed to be a wilful defaulter, i.e., does not pay even if he/she can, diverts the funds, or disposes the collateral without the lender’s knowledge then a criminal case may be filed against the defaulter.
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