What will happen if bank sends legal notice for non payment of loan

719 votes

It has a very broad procedure, if you get a legal notice by that will not get you to prison
before giving legal notice to you from the bank, they will approach an advocate and from that advocate legal notice will be issued to you
that states you have to face the court due to non repayment of take loan, for that you have to approach an another advocate for replaying to that legal notice there you will have 3 months of time to revert back saying within a year you will be clearing, if not they will file a suit on you in the court then you will receive calls to attend the court, from there it will goes to a court decision in various forms.

Advocate Sharath Chandra Murthy LawRato

962 votes

Hai,
I need more information about your case.
1.What is the loan amount?
2.What is your business?
3.What is the reason for loss?
4.How many EMI's paid?
5.How many remaing unpaid EMI's?
6.Any property attached or not?

Now a days banks are very strong.
Bank people are not accepted yiur reqest for repayment after 1 year. If any possibility contact the brach manager or credit manager of your bank and request pay as an instalments for pending amount.
Once your cheque was bounced by the bank, they file a criminal case against you. Possibility of arrest any time if cheque was bounced.
So, better to negotiate with bank officials to solve the issue smoothly.
If you have any query contact me through email or by phone.
Have a nice day. Good luck.

Advocate Syam Charan Godi LawRato

209 votes

When a bank sends a legal notice for non-payment of a loan, it signifies a critical phase in the loan recovery process. Here's what typically happens:

1. Initiation of Legal Action: The bank sends a legal notice to the borrower, demanding repayment of the outstanding loan amount along with any applicable interest and charges. This notice serves as a formal communication of the bank's intent to take legal action if the borrower fails to comply.
2. Response Period: Upon receiving the legal notice, the borrower has a specific period, usually mentioned in the notice, to respond and either repay the loan or communicate with the bank to negotiate a settlement.
3. Negotiation: Borrowers can attempt to negotiate with the bank during this period. Depending on the bank's policies and the borrower's circumstances, the bank may consider restructuring the loan or settling for a reduced amount.
4. Legal Proceedings: If the borrower does not respond or fails to reach an agreement within the specified time, the bank may proceed with legal action. This can involve filing a lawsuit to recover the outstanding debt.
5. Court Proceedings: If the case goes to court, both parties present their arguments, and the court makes a judgment. If the judgment favors the bank, it may result in an order to seize assets or garnish wages to recover the debt.
6. Credit Implications: Non-payment of a loan can have adverse effects on the borrower's credit score and credit history, making it challenging to secure credit in the future.
7. Recovery: The bank's primary goal is to recover the loan amount. It may auction or sell the collateral (if applicable) to satisfy the debt.

It's crucial for borrowers to take legal notices seriously and address them promptly. Ignoring such notices can lead to more severe legal consequences. Seeking legal counsel or consulting with the bank to explore repayment options is advisable.
Please note that the specific actions taken by the bank may vary depending on the terms of the loan agreement, the jurisdiction, and the bank's policies.

Advocate Chikirsha Mohanty LawRato