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UI (20/M) am under huge stress when I got to know my father has a debt of close to 1cr. 30-40 lakhs is loan from 2-3 banks, rest all through multiple personal contacts.
He was a gov employee in Andhrapradesh (not a business owner) and now he’s close to 55 when he declared this to me. (Always treated me like a child not telling me the truth where he gets money, where does it go etc) .
I’m currently pursuing my undergrad with an education loan and I have no idea how will I repay this huge amount on my own knowing they have started to have medical issues and may only have 15-20 years by when I’m not sure how will I survive with all this burden of money, and carrying 3 lives(my father, mother, grandma) on my mere salary. (I might even go unpalced.)
Am I legally obligated to repay my father’s loans? (Personal advice)What should I do after I graduate?
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EIf all loan are unsecured then you can dump but I am not sure let’s wait for the community engagement.
Let’s start at least one positive thing. Start SIP as soon as start earning with rule of 5-10% increasing per year rule.
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UNo what is SIP is gonna do? As long he did not sign anything he doesn’t have to pay anything. Better to run and start a new identity then do SIP to repay 1 crore.
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KNAL. Don’t stress.
You are not legally obligated unless you signed something when you were above 18 years old.
Rest on who owes what based on what they signed and what they owned is different.
Yes. Unofficial loans taken fall under a difffent category. The more you personally engage with those parties you get dragged into the quagmire.
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KIt depends on how you want to deal.
1. Ignore until they escalate.
2. Pay them off if you want to live peacefully at the same location. They will ask you to sell any inherited father or ancestral assets you inherited (if any), gold, etc..I am assuming no siblings. Under no circumstances get married until the above issues are resolved or you can put enough distance between them so that they cannot trace you.
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UYou are not a borrower, the way agencies trick is to tell the court you inherited the assets and they need to recover from that
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Don’t do it
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Don’t sign any papers and reply to legal notice clearly you are not a borrower and not obliged to that
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IF BANKS HARASSES YPU GET A DEBT LAWYER AND FILE A CASE IN TRIBUNAL COURT CITING YOU DON’T OWN Inherit OR OWN ASSETS AND DON’T HAVE LIABILITY TO LOANS-
UMy father doesn’t have any assets(no house,nothing) so I won’t be inheriting anything! Does that mean I won’t be inheriting the debts as well?
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UThe liability to discharge any debts owed by your father only extends to the assets you inherit. Children cannot be made to pay parental debts out of their own personal assets.
Now, take this with a grain of salt. This isn’t actionable legal advice from a lawyer but from a random internet person. As any half decent law student will tell you, the answer to any legal question starts with, ‘it depends’.
For your personal sanity, consult a lawyer on what your obligations might be. It is worth the expense.
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UYou never inherit debts as per law
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The only thing recoverable are assets which ypu do not have.
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Just hire a lawyer and put it in front of the tribunal court and lok adalat. -
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FNAL just a weird idea that popped up in my mind
legally change your name and surname… whatever you like… probably that way you could show yourself as known and not related to your father… that way maybe you can avoid the legal consequences and changing name and surname wont ever change the reality cause you’re your fathers son afterall…
some lawyer pls lmk if this idea could possibly work??
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UYeah, no. Changing your name in India involves letting the relevant authorities know and submitting a notification to be printed and published in the Gazette of India. Changing your name doesn’t sever your relationship or legal obligations to your parents. Like putting old wine in a new bottle. You can dodge your obligations for sure, but you don’t need to change your name for that.
Somewhat decent, but juvenile, idea on paper, doesn’t work in execution outside of a movie.
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UThe loans that your father has taken can only be recovered from him or his assets. As per your statement, since there are no assets to inherit, there is nothing for you to pay to the bank.
The bank might harass you and issue notices to you and others involved once the EMI/payment defaults begin. They may make a claim against his PPF and pension, but they cannot legally hold you liable for the debts.
This advice is based on the assumption that you have not signed any documents with your father as a co-borrower or guarantor.
However, please note that the student loan will need to be paid by you as you are a co-signer on that loan
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AHow could your father have 1cr debt even though he is a govt employee. Definitely, financial education is a must for everyone.
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UBeing a gov employee he will get enough to close 80-90% of loan at retirement, if does not make it worse by then
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UHi. Are you sure that the Banks have given him 40L loan without any collateral? How is it possible that he took another 60L debts from others? How old is the debt? Is this just principal or is interest included too? What is the application of this funds – into investments, repaying other loans, expenses etc? So first put the exact numbers on paper and then go for a professional advice. Talk to your parents and ask his plan. You need to stop worrying about this and concentrate on your studies. Else you will be adding fuel to fire.
I am not a lawyer. But there are ways to get out of trouble and you need not worry about this.
People have already gave good advices here.
Yes, you need to talk to a lawyer. Also talk to a chartered accountant. Make your own enquiries and meet the right people.
You will come out of this with minimum loss. All the best.
Edit : You said your father ‘was’ a government employee. Did he retire early? Where did the PF, Gratuity, leave encashment go? If he is retired, Did he notify the banks as bank usually add a clause in the loan agreement to notify them of the financial structure changes, changes in job, location, income levels etc.
Also do you have access to his CIBIL report?Somehow I am feeling that your father is trying to scare you or teach you a lesson. Something is definitely missing in your post. Don’t take it otherwise, but please think with all your senses together. Did something go wrong in the past year or so?
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UHow does your father have a 1Cr debt and no asset? Like did he used all money for his personal leisure or what. Anyways you are not personally liable for the loan unless you inherit your fathers assets.
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UJust curious, When you say asset inheritance, does it mean the assets built by him directly?
If I inherit Land passed from my grandfather to father and then to me, will I be liable for my father’s loans(which could be recovered from the assets I inherited)?
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IYou are not responsible for your father’s loans. Don’t sign anything if someone asks you to sign anything. Don’t personally engage with the personal contacts as they will set their sight on you.
You have to separate yourselves and your finances from your parents if they aren’t. Bank loans will be paid most likely by your father’s retirement funds.
For personal loans it all depends on what kind of loans they were. If they were in cash your father can just deny paying them and nobody can do anything legally because there’s no proof.
It’s best that your father pays your loans first if he has no hope of being solvent.
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UNAL
Without knowing all the details in a general sense there is no loan that is passed onto you because of your father. Generally the worst case would be that the lender might acquire all the assets of your father and you dont get any inheritance. But in most (all?) cases you wont have a liability unless you signed something to take on that responsibility.
So just study hard, slowly and steadily land on your own feet to recover the situation.
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CHi …
Just some tips to reduce the liability on your head.
1. Invest in Direct Mutual Funds via Coin/Grow/Paytm. Keep small SIPs, maybe 500-1000rs a month. It will go a long way once you’re 30 or so.
2. If possible, take a term insurance policy for your dad, price will be on the higher side since he is 55 years old, but in case in the next 10 years or anything (God Forbid) does happen to him, you will get the Insurance amount within 1-2 weeks in your account without tax deductions (?I think, not sure). Maybe 1-1.5 cr term insurance should be fine, otherwise 2cr, depending on your affordability.
3. Keep a Recurring deposit for yourself, again, start small, maybe 500-1000 rs a month, you will have some money in hand to stand on your feet once you finish your studies.
4. I think Education Loans have some grace period after which you can start repaying it, like 1-2 years interest free period and then they start with their EMIs. Anyways, education loans also have tax benefits once you start earning.
These are the pointers I have for you now from the top of my head. Life is hard I know. But since you know the problems before hand when you are a young adult, you can plan strategies now which will help you and your family to be stress free when you touch your 30s
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UWell if you inherit any property or assets from him then you may have to liquidate those assets to pay off those loans.
Everyone will say lot of things but banks will not easily leave anything.
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BI’ve never been high on anything. I will remind you that this is a legal discussion forum and it works be a shame to have to file FIR on you for defaming my character under Section 499. Do you really wish to proceed?
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BMaybe you don’t have the intelligence to comprehend legal concepts maybe it would be best to stay silent rather than run your mouth and display a complete lack of knowledge. If I was a bit more uncharitable I might go as far as saying somewhere a village is missing their idiot, but let’s not get ahead of ourselves. The life lesson for you here is to educate yourself and speak strategically.
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EOP, based on your financial conditions, 1.3cr looks like a huge amount and it will take a life time to pay it off. But if you do well in your studies and get into one of the top companies, it’d a very manageable amount to pay off. Rather than focusing on building your career, earning a lot and helping your dad, it seems like you are falling into what to do when my dad dies??
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MI’m in the same boat as you. But my dad has 2cr debt, recently his business failed and got to know he has multiple debts from banks and relatives.
My education was supposed to be done from education loan, but it didn’t happen because of poor financials, no assets. I dropped out a month ago. And now i have nothing to di
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PDid you ask him what was the money used for? Are these taken from a bank or money lender? Can you sell your assets? If this banks, don’t worry you are not obligated as you didn’t sign anything, even if the bank says so. If it’s the money lenders, sell your assets and settle with them by pleading his age and medical condition. Your entire family should plan to relocate abruptly without notifying anyone in the event nothing works.
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PPlease do get a proper clarity what was this money used for. Was it just for leisure or did he buy some kind of asset.
I know some who was in similar situations few years ago his father had taken multiple loans both secured and unsecured to buy a piece of land which was disputed (the son wasn’t aware of this)
When he suddenly passed away, his son got a barrage of lenders at his place demanding he payback. Thank fully when digging through all the files at home he found some property papers which turned to be the one he bought. He somehow got this litigation cleared using a politician help and had give away quite a some from its sale and than he paid off the loans.
He only paid off the loans coz he felt people would tarnish his father’s name and he didn’t want that.
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UNever stress, always be happy. just trust God, leave on him, and you will get the right way. You will be stronger in the future, If you will pay, it there will be many ways of it. Taking stress it will make weaker to you.. Just be bold and face the challenges… There will be a way of solution. Just think, you have not done anything wrong.
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UYou are nowhere related to the debt so you don’t repay a penny for it… However if your father goes under solvency proceedings, all his assets will cease and the official liquidator will settle the accounts…
That means if the house you live in is owned by your father, it is going down if your father doesn’t pay the loans back… So it will bring trouble…
If I tell you my story, my father is a gambling addict and we don’t even know how much he has taken from his personal contacts (I’m pretty sure it’s more than 1cr from his personal contacts alone) and he has also taken aprox 10-15lakhs from Banks and other institutions (formal sector)… Even after repeated warning he didn’t listen and now he got nothing in his hand and he also sold his house for gambling (casinos literally mess your brain up)… The thing is you won’t inherited a single penny from him… So start working hard for yourself because now you have to build your own net worth… And I suggest please exclude your father from discussing your personal finances…
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