Doctors Loan - borrower died, insurance agent asking EMI suddenly
My brother-in-law (was a doctor by profession) got a doctors loan of 33 lakhs from Bajaj Finserv last year. My brother-in-law passed away on April 25 due to heart attack. There is an outstanding balance on that loan (there is an insurance on that loan but not covering the whole amount). My sister is coping up with the sudden loss and doesn't have a profession (and so no income). She has filed the claim on the insurance on the debt. Right now the collection agents from Bajaj are at her door asking for EMI right now. They are threatening that they will shout in front of the door at her.
I have read in some place that paying EMI (on behalf of the borrower) after filing a claim is not needed. Is this the right process on the insurance collection agent's part? How to proceed in this case to stop the harassment and handle the situation?
Asked in Civil Law from United States
1) your sister is not liable to pay her late husband debts . her liability is limited to extent of property of her late husband inherited by her
2) refuse to pay . she should inform them that she has not inherited any property of her husband and is not in position to pay
3)if they create a nuisance lode police complaint of criminal intimidation under section 506 of IPC against collection agents
4) record their threats . it will come in handy for lodging police complaint
5) if possible install CCTV cameras around the house
1. The insurance company is liable to the extent of the amount insured and not beyond it.
2. The lender can at the most file a claim for recovery in the court to recover the amount from the property, if any, left by the deceased borrower. It cannot send the recovery agents to the house of your sister to harass her in this manner. It is advisable that she should file a complaint of criminal intimidation against them to the local police.
3. It is not true that EMI is not to be paid on the demise of the borrower. Your sister continues to be liable to pay the EMI if she is in possession of the movable or immovable assets of her deceased husband.
4. If a claim for recovery is filed against your sister in the court then she may contest it.
The action by the recovery agents is illegal. They cannot threaten even the borrower the way you have narrated. The Supreme court has come down heavily on not only the banks but also on all NBFCs too for adopting illegal methods to recover the loan amount. The apex court apart from passing strictures have also warned the erring companies/banks with strict legal action against them if they have been found to adopt such criminal activities to recover the loan amount. They can approach court for recovering the amount legally and should not adopt any such illegal means.
Your sister can lodge a complaint with the local police for the atrocious acts of the recovery agents including their threat calls.
Once a insurance claim is pending the company has to wait until disposal of the claim and after adjustment of claim amount, it should notify the balance if any to the heirs of the borrowers provided the heirs of the borrowers are held liable legally for the outstanding loan.
You may consult a local lawyer and issue a legal notice to the company warning them not to indulge in any undesirable activities including the illegal threats and recovery measures.
Hi, after the death of your brother-in-law they have no right to claim the EMI, insurance was done to protect borrower from uncertain events so lodge a police complaint against the insurance agent.
the collection agent has no right to shout or do any this wrong against your sister or her deceased husband(borrower) if he do it again then immediately file a complaint aginst him before police or court and also send a legal notice to his company for his conduct and claim compensation for harassment and defamation, if the company is not ready to pay the amount within notice period then you may file a civil suit against the bajaj com. and the collection agent.
you may contact over the phone or mail after pay the consultation.
Advocate, New Delhi
Its illegal to come in front of the house and threaten. I strongly advice your sister to visit jurisdictional police station and file complaint against the company and the agent and provide his contact number and his other details. Police will warn him and company or may take action against them to stop them from using pressure tactic against her.
Later she can approach the Company directly hand over the death certificate and they will then contact the Insurance Company to claim the balance loan dues. Insurance company has to pay the balance loan amount as they have insured his Loan. Your sister is not party to the loan transaction hence not liable.
The procedure adopted by the recovery agents is not permissible. It is advisable that the sister files a police complaint against the agents who are coming and threatening her. this would qualify as an offence under section 506 IPC. Further, the wife is not liable to pay the debts of her husband. however she would be liable to pay the EMI if she is in possession or have inherited the property of her deceased husband.