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Business went into loss and unable to pay back multiple loans
20-Jan-2023 (In Civil Law)
We have a business started without any capital and got help from financial institutions by showing good transactions over the period of time, it was running well for two years till the last year April, and things started changing next month onwards from May as orders and payments started to fade away. Gradually loans piled up, cash flow reduced drastically, paid existing EMIs, salaries, rents with available amounts which we already borrowed from banks and NBFCs. Now we have started getting notices and court summons from various financial institutions as we defaulted in multiple loan EMIs and accounts moved into NPA stage.
My question is:
1)What is the legal procedure, maximum punishment and maximum time we can ask to pay back?
2)Do we have to hire a lawyer to respond the court summons?we got a summon from other city as well, what should we do?
3)We do not get the enough time to pay back and if they ask for settlement, what should we do as we do not have money to settle the matter?
It, s normal in business up's & dawns but if you have some strategies to tackle the same, then you have another option. Otherwise you should receive summons /notices from any Hon'ble court. I would like to contest your matter. Whatever it is. Thanks.
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1. Legal procedures, maximum punishment and pay back time can be answered after studying case.
2. Yes, You should certainly hire a lawyer to reply and to defend you.
3. Do not worry at all time will be managed according to your convenience. But don't delay personal meeting.
2. Yes, You should certainly hire a lawyer to reply and to defend you.
3. Do not worry at all time will be managed according to your convenience. But don't delay personal meeting.
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Adv. Hira Lal Jha
Delhi | 25+ Answers
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If you have mortgaged any immovable property against the loan, the banks & financial institutions can proceed under the securitisation act. One must take each and every summon / notice seriously and respond timely in accordance with law.
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its about seeing how to deal with the matter so as to buy you time in which meantime you could possibly arrange for the money. and then from there could also see if the matter can be settled out of court
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Adv. Shobhit Bhatia
Delhi | 100+ Answers
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Ofcourse you need good legal advice to deal with the situation. Ideally you should have started negotiating with your creditors much earlier when the cash flow was slowing down. Now that you have no cash the lenders will understandably move to attach your personal assets and invoke guarantees, including personal guarantees furnished you. Ordinarily there is no "punishment" for default, but as I said lenders will seek to liquidate your assets to recover their dues.
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Adv. Salim Ambar Inamdar
Delhi | 25+ Answers
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