Not able to pay home loan emi due to job loss

649 votes

When a bank issues a summon for non-payment of home loan EMIs, it means recovery proceedings have formally started — usually either a civil recovery suit or action under the SARFAESI Act, 2002. The most important step is not to ignore the summons: if you don’t appear or reply, the court/tribunal may pass an ex parte order in favour of the bank, after which the bank can proceed to attach and auction your property. Since you admit you currently cannot pay, you should do the following immediately: 1. Appear before the Court/Tribunal (yourself or through a lawyer) and file a reply to the summon. In your reply, explain your financial hardship, loss of employment, and seek time for repayment. Courts do consider bona fide reasons and can give you breathing space. 2. Negotiate with the Bank in writing – write a formal letter/email to the bank requesting either (a) restructuring of your home loan, (b) extension of tenure to reduce EMIs, or (c) temporary moratorium, citing unemployment and financial stress. RBI’s Prudential Framework for Resolution of Stressed Assets allows banks to restructure loans once, if you show genuine intent. 3. Seek Settlement/One-time arrangement – if you can arrange partial funds, ask for a one-time settlement to close the matter. Banks usually prefer recovery rather than litigation. 4. Protect your property – if the bank moves to auction under SARFAESI, you can approach the Debt Recovery Tribunal (DRT) under Section 17 of the Act and challenge it.

Advocate Sanil Sarkar LawRato

604 votes

just visit the bank tell them your situation and ask for some time. what kind of summon? is it from the court or bank? even if a court case is filed against you by the bank go to the court on the date and tell the honourable judge your situation and ask for some time. if it is summon for appearance for arbitration proceedings then just draft a letter stating that you don't want to continue arbitration via this arbitrator because the person is biased toward the bank. and submit it to the arbitrator's office.

Advocate Vivek Vilas Sable LawRato