Liability of guarantor in personal loan without mortgage
Debangshu Ball
(Querist) 17 July 2013
This query is : Resolved
Sir
I am the guarantor of a personal loan in SBI. The loanee and myself are Central Govt. employee.The outstanding amount is 4.85 Lacs. Recently the loanee has passed away. I have also received two bank notices from the SBI after his death.It was mentioned in the notice that being a guarantor I have to settle the amount otherwise legal action will be initiated against me. The fact is that, his wife is alive with a fixed asset, a two storied house etc. She will also get the terminal benefits from Govt. of India and subsequently the family pension.
Under such circumstances, what type of problem may arise and by what means I can free myself?
ajay sethi
(Expert) 17 July 2013
on death of the principal debtor the bank is taking easy way out . as you are the guarantor of loan your liability is co extensive with that of principal debtor . hence bank is seeking to recover the money from you .
the wife has inherited the property of her husband . the bank can seek to recover the loan amount from her
Dr. Jyothi Vishwanath
(Expert) 17 July 2013
First the bank has to proceed against the property of the principal debtor. Only afterwards they can proceed against you. Take the services of a shrewd lawyer and reply the Bank by serving them a legal notice.
Rajendra K Goyal
(Expert) 17 July 2013
Being a guarantor of the loan the liability is co extensive. If the wife of the deceased has inherited property / terminal benefits, your liability is not reduces. Either you should proceed to pay yourself or pressurize the widow to clear the outstanding. If you pay the loan legally you will enter in the shoes of lender and can recover your amount from assets of the deceased. You should try to get a lien / attachment on leave encashment and other attachable payments of the deceased from court through Bank.
Dr. Jyothi Vishwanath
(Expert) 17 July 2013
Agreed to Mr.Rajendra. You have to do all fast or else if the widow sells all the property, then you will not have any remedy.
Guest
(Expert) 17 July 2013
Dear Mr. Ball,
In personal loan case without any mortgage, the liability rests with either the principal debtor or the guarantor. In the case of death, when guarantor is alive, inheritence of widow and terminal benefits like family pension, gratuity and PF has no relevance for recovery of loan amount by the bank. Moreover, neither the gratuity nor balances of PF of the deceased employee are attachable by court of law. Further, her personal entitlement of family pension can also not be attached by the bank for recovery of dues of the deceased principal debtor.
So, you will have to bear the brunt unless you make the lady ready to pay the loan dues of her husband. However, one thing can go to your favour, if the agreement contains the clause that the recovery can be made from the legal heirs also. In that case she can be made liable to pay the debt of her husband, as she inherited the assets of her husband. Try to get that information, as that can help you out of the problem.
