Legal Question in Bankruptcy in India

Re: Financial Mess

Hi,

Answers to the following questions are relevant to the question you raised:

- Did the creditors already initiate legal proceedings against her or her husband for the recovery of the amounts lent?

- Did she mortgage her properties to the creditors?

- Does she own any immovable property?

- Did she avail the loans in her name or in the name of her husband? If the loans were taken in the name of her husband, was she a surety to the loan?

Let us assume that the loans were taken in her name or that she is a surety in a loan transaction:

Then, when the repayment is defaulted, the creditors may file civil suits against her. In such a case she will have to face execution proceedings:

Execution can be done in 4 ways..

1. Arrest of the judgment debtor

2. Attachment and sale of immovable or movable properties

3. Attachment of salary

4. Sale of mortgaged property.

Since your friend is a lady, she cannot be arrested in execution of a decree in a civil case.

Her salary is liable for attachment. The calculation for salary attachment is: (Balance of Basic Pay - 1,000) / 3. The 1/3 of the amount thus arrived is liable to attachment for 24 months.

If she mortgaged her property, she will have to see that only that much portion of the property sufficient to fetch the decree debt is brought for court sale.

If cheques issued by her are dishonoured, she must immediately consult a good lawyer for proper advice.

It may better for her to apply to civil court to declare herself as an insolvent.

If detailed information is furnished, we'll try to probe deeper into the problem...

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