Issued notice and mail to company

Dear Sir,

The fact that you have a legal notice attached to the email means they are escalating the matter. Your first step should be to directly contact the chit fund company to understand the terms of their legal notice and the amount they claim is due. Do not ignore this communication.

Here's a breakdown of what you can do:

Review the Legal Notice: Read the legal notice carefully. It should state the outstanding amount, the deadline for payment, and the legal action they intend to take if you fail to comply. It may also include details about penalty fees or interest charges for the delayed payment.

Contact the Chit Company: Immediately call the chit fund company and speak to a representative. Acknowledge that you received the notice and explain your situation. Try to negotiate a payment plan or an extension. Be honest about your financial situation and your willingness to pay.

Document Everything: Keep a record of all your communication with the chit fund company, including emails, letters, and the dates and times of phone calls. Note down the name of the person you spoke with and what was discussed.

Legal Consultation: Since this involves a legal notice, it would be wise to consult with a lawyer, even for a brief consultation. They can help you understand your rights and the legal implications of the notice. They can also assist you in drafting a formal response to the company.

Since you've already paid a significant portion of the chit amount, you are in a stronger position than if you had defaulted from the beginning. Your immediate goal should be to prevent further action from the chit fund company and to resolve the matter with them directly.

Dear Client,
Chit Funds are registered by State Governments under the Chit Funds Act, 1982 administered by the Ministry of Finance but with responsibilities of implementation resting with the States. Borrower is personally held liable for repayment of the debt. You can make a prayer to the Chit Fund Company for some more time to settle the dues but cannot escape yourself from your liability of repayment of loans. Moreover, legal actions may also be taken by a chit fund company against a defaulted borrower including filing a civil suit in court or initiating criminal proceedings against him/her. The chit fund company may also make use of debt recovery tribunals to recover the dues they are owed from the defaulter borrower by attaching their property or guarantor's property. Under Section 64(1) of the Chit Funds Act, 1982, any dispute touching the management of a chit business shall be referred by any of the parties to the dispute, to the Registrar for arbitration if each party thereto is one or the other. Under Sec.66(1) of the Act, if the Registrar is satisfied that any matter referred to him or brought to his notice is a dispute within the meaning of section 64, he shall, subject to such rules as may be prescribed, settle the dispute himself, or refer it for disposal to a person appointed by him. The Registrar hearing a dispute under section 66, shall, in addition to the powers conferred on him under that section, have the same powers as are vested in a Civil Court while trying a suit under the Code of Civil Procedure, 1908. So, on receipt of a legal notice from the chit fund company, you should consult with an Advocate to explore the remedies and grounds to challenge the legal action initiated by the Chit Fund Company for recovery of loan or debt.

Dear Sir,

Don't panic: The notice is a preliminary step and not a court order. It's a formal way for the company to demand payment and warn you of potential legal action.


Review the notice: Read the notice carefully to understand the exact amount they are claiming and the specific legal provisions they are citing. Also, see if they have included any additional charges or penalties.

Communicate with the chit fund company: It is best to try to negotiate directly with the chit fund company to find a solution. Explain your financial situation and propose a plan for paying off the remaining dues, possibly in installments.

Seek legal counsel: It is highly advisable to consult with a lawyer, particularly one who specializes in financial or consumer law. They can review the legal notice, advise you on your rights, and help you draft a formal response. A lawyer can also help you negotiate with the company and represent you in court if the matter escalates.