Legal Question in Banking Law in India

Failure to Pay Credit card and Personal Loans
One of my relative in India recently informed me that he has about 30Laks rupees in debt to credit cards and personal loans. He was paying EMI so far but with the current recession his business is not good and he is unable to pay. He also got sick and was hospitalized with severe kidney problem recently. He has two kids going to school and non working wife. He has no source of income other than the business which is not going well (almost shutting down). In this situation we are afraid that bank may send debt collector goons after the family. What are the bankruptcy laws in India and what can he do? Can the banks send him to prison? Can he not ask for debt consolidation like in the US? Please help.

Asked on 2/04/09, 4:59 pm

4 Answers from Attorneys

J. Radhakrishnan independent Practice

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Re: Failure to Pay Credit card and Personal Loans

Your indebted relative can file an insolvency application in the court which has jurisdiction over the place where he permanently resides or resided. However he cannot escape prosecution if any creditor to whom he might have given cheques find them bounced. Ask your relative to consult a local lawyer and proceed.

Answered on 2/04/09, 9:39 pm

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Homi Maratha N.N. Maratha & Co.-Advocates

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Re: Failure to Pay Credit card and Personal Loans

I would advise the debtor to file an insolvency petition.

Answered on 2/05/09, 7:08 am

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