Write off - Pay day loans totalling around 20L

Dear Client,

Your advocate’s statement does not appear legally correct because Section 37 of the CPC only deals with the execution of decrees and has nothing to do with writing off or cancelling loans, while Order 37 CPC is actually a provision used by lenders to recover money through a fast-track court procedure in cases involving loan agreements, cheques, promissory notes, or written contracts. Therefore, there is no legal provision under Section 37 CPC that can automatically wipe out your payday app loans. However, many payday loan apps charge excessive interest, illegal penalties, and use unlawful recovery methods such as threats, harassment, contacting family members, employers, or misusing personal data, which is illegal. You should immediately stop taking new loans to repay old ones, prepare a complete list of all 50 loan apps with the principal amount, interest, penalties, and due amount, identify which lenders are linked to RBI-registered NBFCs, and try to negotiate written settlements instead of speaking on calls. You should also preserve screenshots, call recordings, threatening messages, and abusive language because if the lenders continue harassment or misuse your data, you can file complaints before the police, cyber cell, RBI, and other authorities. In many such cases, people are able to settle for only the principal amount plus reasonable interest rather than the entire inflated demand.

Dear Client,

The advice regarding complete write off under section 37 of the Code of Civil Procedure is incorrect as this provision does not allow waiver of loans. Your liability will not automatically extinguish on that basis.

Your strongest course of action is to immediately send written representations to each lender clearly stating that you are unable to continue under the current terms, objecting to harassment, and expressing willingness to settle the accounts. Written communication is important to create record of your position and to protect yourself against illegal recovery practices. At the same time, you should pursue structured settlement or one time settlement with each lender instead of making random partial payments.

An advocate can play a crucial role in this process by drafting proper legal notices, handling negotiations, and ensuring that settlements are documented in a legally binding manner. This will also help in controlling harassment and preventing unfair demands. You may also take action against lenders using illegal methods through complaints before appropriate authorities.

Please consult a local advocate to assist you in drafting representations and negotiating effective settlements.