• Dad defaulted on several personal loans

My father started taking personal loans from around 2004-05 since his financial status got worse after his close friends cheated on him for money. His business started failing and to sustain, he took personal loans from every possible bank along with credit card. The loans were mainly used to repay the EMI, which climbed to over 35K a month. Without any other income and the monthly EMI in place, he was stuck and he started selling off the properties.

I and my sister fought with him and saved the last house that we live in today, later in a couple of months he left us and went to live with his sister in south India. We face a lot of trouble then since mom was unemployed and I and my sister were too young no one bothered us. Now after 10 years the bank people are coming back and asking us for money, I even settled the loans of few banks. But after sisters marriage, I have alone been the bread-winner of the family and with some debts already on my head which I can manage.

I am not in talking terms with dad, and he is a senior citizen now and does not have a source of income. I already have loans to pay from banks and relative and also I never got the chance to save any money. I am unable to move since this is the only home (registered on dad's name with no loan on it) left. Renting another place would really hurt my budget. And if we sell the house to clear the loans, we would never be able to buy another.

I took some advice from a lawyer friend of mine, but it involved paying off the bank which is not possible. So is there any way the bank will put my father's loan accounts in bad debts and stop troubling us?
Asked 1 year ago in Civil Law from Mumbai, Maharashtra

Dear Client,

If this property is loan free, bank cannot do any thing, but to file case for recovery of loan amount which will go long,

And demand of recovery not possible against you but father only. Some hoe manage to get the property transfer in your name either by GIFT or WILL, than it will become your personal property and bank cant claim.

Until property is in your dad name, he can`t be declared insolvent and bank can proceed recovery through court by stay and attaching this property for recovery of debt. But that will be long process.

Yogendra Singh Rajawat
Advocate, Jaipur
13233 Answers
17 Consultations

4.6 on 5.0

Dear Querist,

If the present house in which you are living has been mortgaged with Bank ?

Was any case filed by the Bank before Debts Recovery Tribunal ?

Regards

Rahul Kapoor
Advocate, Lucknow
24 Answers

Not rated

Hi, the bank officials cannot sell of the property if it is not mortgaged to the bank ... It is advisable to get the gift deed of the house done from your fathers name on to your name

Hemant Chaudhary
Advocate, Gurgaon
4258 Answers
31 Consultations

4.9 on 5.0

the bank can attach this flat and put it for public auction to recover its dues

try for a one time settlement with the bank (with interest and penalty waived)

Yusuf Rampurawala
Advocate, Mumbai
4458 Answers
25 Consultations

5.0 on 5.0

1)when was last payment made by your father ?

2) suit if any for recovery has to be filed within period of 3 years

3) I presume your father has not acknowledged his liability to make payment after expiry of 3 years

4) claim of bank would be barred by limitation

Ajay Sethi
Advocate, Mumbai
66959 Answers
4043 Consultations

5.0 on 5.0

Hello,

Account can only be put in bad debts after following the process of law.

Was the property on which you are living mortgaged against the loan for which bank has initiated the process of recovery?

Regards

Anilesh Tewari
Advocate, New Delhi
16918 Answers
259 Consultations

5.0 on 5.0

Sir since the house is in name of dad it can be attached by bank to clear there dues. But the case bank has not asked any amount from your dad and no suit is filed from years and now they are coming then there claim shall be barred by limitation.

Shubham Jhajharia
Advocate, Ahmedabad
19345 Answers
75 Consultations

5.0 on 5.0

This is my response to you:

1. Your father has created a lot of problems for you and left you in deep trouble;

2. You just don't need a good lawyer but also a very good chartered accountant;

3. A chartered accountant will help you asses the way to pay off all the loans and devise tricks to avoid the burden of the banks;

4. You will need to pay the loans anyhow, you can run away from from time to time it but you cannot keep hiding;

5. You must search for any fixed deposits your father may have kept;

6. Is there any property, land or plot or anything else which you can mortgage or settle with the bank?

7. Why don't you ask the bank to trouble your father if the loan was taken on his name, why should you suffer?

8. Your mother could have filed divorce and the burden would shift away from you and your mother and sister;

9. If you have not reaped benefits of the loans then why should you be paying?

10. The method of last resort is to sell the house and pay off the loans, but it is still better if you shift the burden on him;

111. If your father is unheard of for 7 years or more your mother can file for separation and then divorce.

Gowaal Padavi
Advocate, Mumbai
1826 Answers
2 Consultations

5.0 on 5.0

do not sign any document of any bank. do not talk to bank officer on phone. Take all the notices you receive at home. have a rent deed in your name about the house, keep touch with a good lawyer, dealing in SARFAESI Cases.

Jugal Kishore Agrawal
Advocate, Jaipur
81 Answers

Not rated

If he don't have properties in his name then he can go for insolvency application.

Other wise credit card loan are non secured loans and that can not be asked from you to repay.

Vimlesh Prasad Mishra
Advocate, Lucknow
5507 Answers
18 Consultations

4.9 on 5.0

Publish a notice in two leading newspapers Hindi and English explain a brief of your case and mention that you haven’t inherited any property of your father and you are not liable to clear is liabilities.

Ruchit Dugar
Advocate, New Delhi
190 Answers

4.9 on 5.0

They will eventually put the same in bad debts. You don't exert about the same. If you get any legal notice don't reply the same without taking lawyer's advice.

Prashant Nayak
Advocate, Mumbai
12901 Answers
23 Consultations

4.6 on 5.0

Dear Client,

Kindly know that the loan was taken by your father and he is liable to pay back the same. Now as you stepped in, to repay the said loan, with the hope that the house which is on your father's name will be saved - then its wrong.

Further as stated by you that the Personal loan was taken, hence in that case the property would not he having any mortgage.

The best possible way out for this is that the said flat is gifts by your dad to you/your wife/ your mom, so that the fathers right on the said property are NIL and then bank wont be in a position to take the lawful possession of the same.

This is the possible option which can be suggested based upon your inputs. better and precise advice can be given post referring to the document in hand.

Expert Jurist LLP

Jyotishwar Bhosale
Advocate, Navi Mumbai
15 Answers
1 Consultation

5.0 on 5.0

There is no necessity for you to clear your father's loans and debts, especially when he is living.

You are not obliged to repay the loan since you have not signed as a guarantor as well.

Moreover since this is a personal loan, the bank cannot attach his property which has not been offered as collateral security.

There is no liability on your part to repay your father's debts.

You can simply refuse to pay any amount to bank, ask them to give a notice to you in writing so that you can tackle this issue legally by obtaining a restraint order against the bank.

T Kalaiselvan
Advocate, Vellore
56726 Answers
702 Consultations

5.0 on 5.0

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