Cheque bounce and may move to court if not paid.

521 votes

Yes. Loan restructuring can be requested even after cheque dishonour, particularly where the borrower has a consistent history of timely repayments. The borrower should immediately approach the lender in writing, explain the circumstances, and propose a reasonable repayment schedule. Though restructuring is subject to the lender’s approval, a bona fide request may facilitate an amicable settlement and help avoid litigation.

Advocate Priyanka LawRato

591 votes

Yes, loan restructuring may be possible even after a cheque has bounced, but it depends on the lender’s policy, the status of the loan account, and the reason for the default. The fact that previous instalments were regularly paid can be highlighted while requesting restructuring. You should immediately approach the lender in writing and request restructuring/revised repayment terms and amicable settlement. You may send an email stating: “Due to temporary financial difficulties, I am presently unable to meet the payment schedule despite having regularly made the earlier instalments. The recent cheque dishonour was not intentional. I remain willing to clear the outstanding amount and request you to kindly consider restructuring/rescheduling the loan and provide a revised repayment plan. I request that no coercive/legal proceedings be initiated while my restructuring/settlement request is being considered. I am keen to resolve the matter amicably and undertake to comply with the mutually agreed repayment schedule.” Please preserve proof of all earlier payments, the bounced cheque, bank statement, loan statement and correspondence with the lender. A cheque bounce can potentially attract proceedings under Section 138 of the Negotiable Instruments Act, so merely sending a restructuring request does not automatically stop the statutory process. If a statutory notice has already been received, it is important to respond within the prescribed period and seek legal advice immediately.

Advocate Hemalatha Narayanan LawRato