Hello, My dad borrowed money through a chit in a private company. Due to loss in business he is not able to repay now. He tried paying some in little portions but since the EMI are high the due amount rose drastically. Now the chit company wants to file a suit. Is there a way legally we could avoid that happening by entering into any negotiations either through court or the chit company? What happens when the company files a law suit? Thank you for your advise.
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You make application to chit fund company to increase tenure of loan to reschedule EMI by reducing amount payable every month
2) if company refuses and files suit contact a local lawyer and file reply denying allegations made
3) contested suits take 15?years to be disposed of
1. When your father has borrowed some amount from a Company, he has to repay the same with interest on agreed terms.
2. No Court will entertain your negotiation with the lending company by involving itself and your father shall have to initiate the negotiation with the said Company and come to a settlement duly convincing the Company that law suit will take ages to be disp[osed of involving substantial amount towards legal expenses and a settlenet with your father will be economically beneficial for them.
3. If the Compny files a law suit, it shall have to be contested by your father dfittingly and if he finally looses, his property will be attached for selling the same for recovery ofn the said dues lying in his name with thye said lending company.
4. There will be no arrest since it is not a criminal offence.
1. if he has borrowed money then he will have to pay.
2. If the borrowing is made through a written agreement then both aprties are bound by it.
3. however if it is found that the terms of the agreement is highly in favour of the creditor giving high rate of interest in his favour then it is not finding on you as the etrms are unconscionable.
4. If they file any suit you will get chance to contest it.
1. The only way you can avoid getting entangled in a court battle is by paying the amount. The court will not give you any waiver if it finds that the company is able to prove the debt.It will pass a decree against you for recovery of principal amount with interest and cost, which can then be executed.
2. When the company files the lawsuit the court will issue summons to you to give you the opportunity to contest the suit.
Try negotiating with the company by writing to them. Either try entering into a one time settlement(if that's possible from your end) or request them to give you en enhanced window to make the repayment of loan. If they file a suit, engage a local local lawyer and contest the matter. It will easily take 8-10 years for disposal of the said case.
You can ask the company to mediate the matter outside the court, however if they proceed and file a case then you will receive a notice and then you will have to contest the matter.
Regards
The financier may file a money recovery suit for the amount due along with interest and court fees.
You can seek time to settle the amount or even can request court for settlement in easy installment.
Alternately you can talk to the company for convenient settlement or restructuring the loan amount.
