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Personal Loan

Guest (Querist) 25 March 2008 This query is : Resolved 
My client has borrowed a huge sum of money from many persons by issuing receipts on plain paper. Now he is not able to pay either the interest or the principal to any of the creditors. Is he legally safe in not returning the money to his various creditors in case any or all of them sue a case against him?
davinder (Expert) 25 March 2008
HE HAS TO DECLARE HIMSELF AS INSOLVENT. IF HE DOESNOT SO THE CREDITOR CAN SUE HIM FOR RECOVERY CASES. AND ON THE OTHER HAND THE PLAIN PAPER CAN BE USED AS THE AGREEMENT OF SELL SOMETHING WHICH YOUR CLIENT HAVE, SO YOUR CLIENT HAS TO TRANSFER THE PROPERTY OWN BY HIS NAME.
Guest (Querist) 25 March 2008
Dear Davinder Ji,

Many thanks for your expert reply. I apologise for not making my query clear. Actually all his properties are mortgaged with several banks and have become NPA. Also, he has given receipts on plain paper to various persons mentioning that he has borrowed money with such and such rate of interest. I would be much thankful to you if you throw some light on how to declare oneself as insolvent.

Thanks,
Mahendra Bagaria
Srinivas.B.S.S.T (Expert) 22 June 2008
file a petition in the competent court praying the person to declare as insolvent. Make a list of his debtors and his total debts and also a list of his properties you have to show that his debts are three times more than his properties. If you want i can provide you a format.
Guest (Querist) 22 June 2008
Dear Srinivas Ji,

Many Many thanks for your reply. I would be much thankful if you can provide me the format and throw some more light on the procedure and of the consequences.

Mahendra Bagaria
Guest (Querist) 22 June 2008
Dear Srinivas Ji,

Also please let me know about the consequences of bank loans after becoming insolvent.

Mahendra Bagaria
Srinivas.B.S.S.T (Expert) 25 June 2008
I will update you a format of Insolvency Petition within a day or two.
Guest (Querist) 25 June 2008
Thank you so much.
KamalNayanSaxena (Expert) 26 June 2008
It is not easy and comfortable to be a insolvent. You must advise your client about the consequences of insolvency.

Let the parties sue against your client which is a long and exhaustive exercise. It is an art to prolong the civil proceedings. Meanwhile advise your client to arrange money because at later stage such type of cases are compromised on fewer amount.





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