what happen if i have a debt and i will change my residence and job location
6 months ago
I currently have a debt of Rs. 24 lakh, and I am in the process of debt settlement. However, I am facing warnings from both my landlord and my employer to vacate my rented house and resign from my job within a month. This is due to constant phone calls and home visits by bank recovery agencies.
I am concerned that if I inform the bank about my change of address and job location, the recovery agencies may continue to harass me at these new locations. Therefore, I am considering not informing the bank about these changes and settling the debt when I have the funds available.
Please advise on this situation
A.Dear
Communication with Creditors: Instead of avoiding communication with the bank, it's generally better to maintain open and honest communication with your creditors. Inform them about your financial difficulties and discuss the possibility of a debt settlement plan or repayment arrangement. Many banks are willing to work with borrowers to find a mutually agreeable solution.
Legal Protections: In India, there are legal protections in place to prevent harassment by recovery agents. The Reserve Bank of India (RBI) has issued guidelines on debt collection practices that banks and recovery agencies must follow. If you are being harassed or subjected to unfair debt collection practices, you can file a complaint with the RBI or the banking ombudsman.
Debt Settlement: If your financial situation allows, you may consider settling the debt with a lump-sum payment when you have the funds available. However, it's essential to have a formal agreement with the bank outlining the terms of the settlement, including the final amount to be paid, the method of payment, and the acknowledgment that the debt will be considered settled after payment.
Regards
Communication with Creditors: Instead of avoiding communication with the bank, it's generally better to maintain open and honest communication with your creditors. Inform them about your financial difficulties and discuss the possibility of a debt settlement plan or repayment arrangement. Many banks are willing to work with borrowers to find a mutually agreeable solution.
Legal Protections: In India, there are legal protections in place to prevent harassment by recovery agents. The Reserve Bank of India (RBI) has issued guidelines on debt collection practices that banks and recovery agencies must follow. If you are being harassed or subjected to unfair debt collection practices, you can file a complaint with the RBI or the banking ombudsman.
Debt Settlement: If your financial situation allows, you may consider settling the debt with a lump-sum payment when you have the funds available. However, it's essential to have a formal agreement with the bank outlining the terms of the settlement, including the final amount to be paid, the method of payment, and the acknowledgment that the debt will be considered settled after payment.
Regards
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A.Dear Client,
If you are planning to conceal or hide the change of new address from the Bank to avoid harassment from the debt recovery agents, then you are going to face the worst consequences. The bank can initiate both civil and criminal suits for recovery of loan from the Borrower. In case the Bank finds the borrower not traceable or absconded from the current or recorded address, then the Bank may issue a Look Out Circular(LOC) to prevent the borrower from leaving the country being a defaulter of loan. Public sector banks have been included in the list of authorities permitted to issue LOC from October 4, 2018 only through managing director and chief executive officers. The purpose of the issuance of an LOC is to prevent a debt defaulter from leaving the country to escape their financial liabilities. A Look-out circular can be said to be a coercive measure adopted by the Authorities to restrict and regulate the movement of persons, who are accused of cognizable offenses, and in certain exceptional circumstances can be issued against guarantors/witnesses as well. In the given situation, both the borrower and guarantor of the loan may face severe consequences once an LOC is issued against them by the concerned authority.
If you are planning to conceal or hide the change of new address from the Bank to avoid harassment from the debt recovery agents, then you are going to face the worst consequences. The bank can initiate both civil and criminal suits for recovery of loan from the Borrower. In case the Bank finds the borrower not traceable or absconded from the current or recorded address, then the Bank may issue a Look Out Circular(LOC) to prevent the borrower from leaving the country being a defaulter of loan. Public sector banks have been included in the list of authorities permitted to issue LOC from October 4, 2018 only through managing director and chief executive officers. The purpose of the issuance of an LOC is to prevent a debt defaulter from leaving the country to escape their financial liabilities. A Look-out circular can be said to be a coercive measure adopted by the Authorities to restrict and regulate the movement of persons, who are accused of cognizable offenses, and in certain exceptional circumstances can be issued against guarantors/witnesses as well. In the given situation, both the borrower and guarantor of the loan may face severe consequences once an LOC is issued against them by the concerned authority.
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