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EHi everyone,
My father was a village revenue officer in a small town. Around five years ago, he opened a clothing shop—a small-scale shopping outlet in our area. This was done in collaboration with a close friend of his, who initially invested about ₹25 lakhs. My father arranged his share by borrowing from multiple lenders, including friends and local moneylenders.
The shop was set up in a bigger space as per her suggestion, and the shop name was also chosen by her. Legally, however, the shop documents were in my mother’s name. Shockingly, the day after the shop opened, she walked away from the business completely—apparently influenced by her relatives, claiming that the entire shop would be theirs. She didn’t provide any formal notice and left everything behind.
Soon after, she took the matter to the village heads. My father went alone and explained everything, including her investment and his financial position. He acknowledged her funding despite the absence of any written agreement. Before 1-2 years back, he also purchased a land using loans, partly involving her.
Later, COVID-19 hit and things worsened. My father had took money via chit funds (Margadarshi, etc.) and received some funds, but the returns were not sufficient. The business wasn’t performing well, though manageable before the pandemic. The shop’s rent was ₹70,000 per month, and we had no stable income to cover even that. To keep things going, my family pledged gold, borrowed more money, and juggled multiple obligations just to stay afloat.
At some point, this friend took legal control over some of the property documents by manipulating a now-deceased local leader who had held them. She also filed a fake case through her sister, alleging that my father owed her a large amount. Ironically, she had earlier claimed she had no relationship with this sister.
Meanwhile, my father continued borrowing from many private lenders—close to 40 different individuals, including family friends and acquaintances—to keep the shop running. Over time, I had warned him several times, even two years ago, that the business was unsustainable and we should shut it down. But he kept delaying the decision, hoping things would improve.
Last year, I insisted strongly again. The business was in worse shape, and I saw this crisis coming. In January this year, I finally convinced him to shut down the shop because he could no longer pay the rent. We were evicted from the commercial space due to non-payment.
In the midst of all this, we tried to settle the matter with my father’s friend. A verbal settlement was made for ₹26 lakhs. He gave her ₹3 lakhs, and the rest was promised after selling a piece of land we own. Unfortunately, the land is under a private loan of ₹20 lakhs at 3RS interest, and my father hasn’t been able to find a buyer for the past year.
Recently, she approached the joint collector, who called for a quick inquiry. Within a short session, he asked my father to pay the entire ₹25 lakhs within two weeks—which is clearly not possible for us at the moment.
Joint collector has no idea about other lenders. My father has pay around 1CR to everyone that he borrowed without interest
Here’s what we have right now:
* Two houses under bank loan, worth around ₹20 lakhs.
* A piece of land worth about ₹60 lakhs, but it has a private loan of ₹20 lakhs on it (has pay the interest around 14 L no accurate)
* My father is still being approached by other lenders for repayments.
* I’ve already contributed ₹16 lakhs over the past two years (₹10L through a personal loan and ₹6L from freelancing and salary).
* I’ve saved up around ₹20 lakhs more from freelancing and my full-time job.Now, I’m at a crossroad. I’m unsure whether to use my ₹20 lakh savings now to settle this main dispute with my father’s friend or wait until we manage to sell the land or house. I’ve always stepped in during crises, but this is a major one. My biggest fear is that using up this money now will only give temporary relief. Once others hear that someone got paid, they may also start pressing harder.
My father is very emotionally invested in resolving things quietly through settlements with village heads or friends, but I’m worried about the mounting pressure from lenders, especially with signed blank cheques out there that could be used for legal cases (cheque bounce, etc.).
He refuses to consider insolvency or formal legal routes, but I’m worried we are digging deeper with no plan. I just want to protect whatever is left and avoid losing everything, including my own financial future.
What should I do?
Should I:* Use my ₹20 lakh savings now to settle with this person
* Or wait until we sell land/house and use the funds to settle everything at once to all other lendersPlease let me know if anyone has gone through something similar or has practical advice. I’d really appreciate your guidance.
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