1) legal heirs are responsible for repayment of instalments to extent property has been inherited by them
2) liability of principal debtor is co extensive with of gurantor
3) chit fund company will sue the guarantors to recover the money
Guarantor responsibilities in case of death of the candidate
Dear Sir, My relative started a 5 lakh chit in a Pvt ltd co with a tenure of 5 years 1) He completed 50% of the installments 2) He got some money from the Auction after deducting the Loss in the Auction 3) He had one more chit of 1lakh, which had not been auctioned and completed 50% of the installments. 4) After few months of the Auction, he died and the death report shows as he died by himself. 5) The family not in a position to repay the remaining installments 6) The chit fund company had insured in the name of the Candidate and it's mentioned as Accidental Policy and the chit fund company saying that they cannot claim the amount from the Insurance company and they cannot write off the money. 7) The 4 guarantors got the legal notice that they have to repay the loan. Kindly suggest how to solve the issue. Thanking You
Asked 8 years ago in Civil Law
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2 Answers
In the event of the death of the borrower and there is no collateral security furnished then the guarantors will be held liable for the balance amount.
The guarantors can settle the amount and can claim this from the borrower's heirs.
