Avinash (Associate) 09 November 2013

Loan recovery by bank for deceased person

My father took loan from personal bank during 2006 year. he passed away the same year. we family members are not guarantors for loan or signed in application form or anything. we did not pay money. now we had a lawyer call up on behalf of bank saying that there is legal proceeding's against us and they have or can issue a non-bailable warrant against us (family members). are we responsible for money? should we pay it back?in case we are forced to pay, should we only pay principal amount or pay it with interest also.

Thanks

Avi

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2 Replies

Kumar Doab (FIN) 11 November 2013

Personal Loan taken by the deceased in all probabilities shall not be a secured loan.

RBI issues guidelines to approach Lok Adalat……………….for such loan/debt.

Estate is inherited.

Debt is not inherited.

The lenders can at the most plead to recover from estate of the deceased inherited by legal heir.

In case of issues the legal heir may approach their lawyer.

Once the debt is statue barred the lenders are not allowed to push for recovery.

Your lawyer may advice that the loan recovery is hopelessly time barred after expiry of 7 years, and may advice to cite the limitation and dispute the debt.

That is why the lawyer or the caller whatever he/she is trying to force you to pay.

If it is not barred by limitation it is a civil liability.

Proceed under expert advice of your lawyer.

The lawyer that has seen all of your docs can advice you the best.