Unable to pay personal loans what should I do

954 votes

Hi
Procedure:
1) An insolvency petition has to be filed either by the debtor himself or a creditor of the debtor in an insolvency court (District Court)
2) For an insolvency petition to be accepted by the court, the amount of debt must be more than Rs. 500.
3) On the admission of petition by the court, a date of hearing is fixed.
4) An interim receiver is appointed by the court to take immediate possession of the property of the debtor. He continues to function till a regular officer is appointed.
5) On the date of hearing, the court if satisfied that the petition is reasonable shall make an order of adjudication.
6) After the passing of the ‘order of adjudication’, the debtor becomes an ‘undischarged insolvent’. After this declaration, all his property is vested in an officer called ‘Official Assignee’ under the Presidency Towns Insolvency Act and ‘Official Receiver’ under the Provincial Insolvency Act, appointed by the court to conduct insolvency proceedings.
7) It then becomes the Official Assignee’s duty to sell the property of the insolvent within a reasonable period of time.
8) Whatever money is generated in the form of sale proceeds is then distributed among the creditors.
9) After the process of distribution is completed, the insolvent is required to collect a certificate of ‘absolute discharge’ which is granted only when it is proved that the insolvency resulted due to misfortune and not because of any dishonest or unscrupulous behavior on part of the debtor. Another point taken into consideration is the behavior of the debtor during the insolvency proceedings which must have been satisfactory.
10) On the award of ‘absolute discharge certificate’, the remaining, unpaid debts of the debtor are cancelled and he cannot be forced or threatened by any creditor to repay the debt amount

Advocate Rajagopalan LawRato

844 votes

Dear Client,
You can file petition to declare you as Insolvent. But you must know the consequences after you being declared as an Insolvent by a court. You will not be absorbed in any job in future and you lost credit worthiness and no loans will be granted by any national banks or non banking financial institutions. Try to clear the loans, if not now, at least in future. Think how to clear loan to banks. You fail to inform about your educational qualifications, lost job and job trials etc., My suggestion is not to opt for Insolvency, try to think of clearing loan and come up with a bright future. Even after this suggestion, if you want to decide to file a petition for insolvency, you must engage an expert advocate who has been dealing Insolvency Cases against banking companies and file a petition for declaring you as an insolvent. But you should file the petition before High Courts which have power to proceed with, to file an insolvency petition by individual against Banking Companies.

Advocate Sistla Rama Krishna LawRato

666 votes

What assets you are having in your name? since how many months you are not paid EMIs? You should be very careful while going for such drastic step. If you are depending upon on job (source of income) then you look for another suitable job and request the bank for more time to repay it. Now a days most of the companies verifying credentials of candidate including default payment to banks /credit cards etc.,

Advocate Sanjeevi Krishna Rao LawRato

930 votes

you can put insolvency petition with the debt recovery tribunal of your concerned area through the newly adopted banruptcy act through an advocate and settle the dispute with the financial institutions

Advocate Innamuri Balasubramanyam LawRato

911 votes

Hello,

Yes. You can file Insolvency Petition (IP) at a district court where you are residing. File an insolvency petition showing reasons for your default in clearing off your debts and show your increasing of liabilities after the loss of your job along with an interim application for stay of your arrest/civil imprisonment till the adjudication of the insolvency petition. Contact a local lawyer and take his help for further process.

Advocate B. Srikiran LawRato