my father, a contractor, took a loan against his work order way back in 1980-89. we have no papers with us. the work could not be completed owing to pressure from local mastans and naturally no payments were cleared against it. subsequently the company ceased to exist and the loans were not paid. now after so many years, to be precise after my father's death in oct 2014, the bank representative came to our house and asked my mother to repay the loan. they are threatening to take legal actions.
my questions are:
will we have to pay the dues? we are not in a condition to pay as my father died of cancer and we are left with no fortune, except the house which is in my mother's name
what action can be taken if we are not able to pay the loans
Asked 1 year ago in Business Law from kolakata, West Bengal
1) your family would be liable to pay father debts only to extent of property inherited by them
2) if house is in your mother name it cannot be attached to recover bank dues
If there are any properties in your father's name that has been offered as collateral security for the said loan, then that property may be brought to auction for the default in repayment of loan.
If there are no assets in his name, then the bankers cannot demand the loan amount from the heirs of the deceased and if they indulge in any such threatening activities, they may be brought under a criminal complaint through the police for the criminal offences.
Neither you nor your mother nor your siblings are liable to repay the debts of your deceased father when he has not left behind any assets which were shared by you all.
If they insist on payment or issue threats anymore, you may issue a legal notice asking them to refrain from indulging in such illegal acts or else they may have to face legal consequences both through civil and criminal
They cannot take any action legally against you people for your deceased father's debts. They have provision to write it off as bad debts due to the death of the borrower.
If any of the legal heirs of your father has inherited any property from him then the lender can make him liable to repay the debts of your father. The maximum which the bank can do is to file a suit for recovery of money which can be contested in defence by you.
The officials can threaten you or forcing for remitting the debts owe by your father. If your father left any assets and you were enjoying the same then you are liable to pay your fathers debts after his demise.