annonymous (na) 28 November 2012

Debt beyond asseats

Mr Prasad has debt claim of 34 lakhs on him , White his total asseats are of 25 lakhs (FD's , Share, and house he is living). He is the only earning member of his family . Now if Mr. Prasad lose case in civil court ? What could be the possible consecunces .

He has to pay all his money to the lenders and remain with empty pockets
Or The court can give some relaxation understanding his current situation ( for example pay 15 lakh to debators and have 10 lakhs for his family and security )?Can the court orders come under humatarian grounds ?

Thanks

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2 Replies

surjit singh (Assistant) 28 November 2012

Court has the discretion to direct for payment in installment, and if the court is satisfied that the borrower capacity to pay is limited then court can pass judgement on humanitarian ground.

Santosh Sharda (self) 14 December 2012

Insolvency Act is for these matters. The debtor can file an application for insolvency so that the matter rests and is settled now. He may not be left with anything but otherwise, even after payment of whatever he has now, he will continue to be hounded for payment from whatever he earns in future, against the decrees received by various creditors. Instead of fending off the various creditors and ruining his life, filing for insolvency will leave it to the courts how to liquidate the assets and distribute between the creditors. The debtor will be free of the pressures of the creditors.

Not having sufficient means is no excuse.