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U[ not sure if used the correct tag.. please ignore if it’s not]
Hi everyone, I need some financial and legal advice regarding an old loan my father took around 13 years ago. The loan amount was somewhere between ₹40-50k (I’m not sure of the exact amount since I was a kid back then). We paid some EMIs in the beginning, but due to financial difficulties, we stopped making payments, and for years, there was no contact from the bank. But around 6/7 years ago there was bank representative visited our house ( no harrasment) and after that my father went to bank if kind of settled things.. ( like that’s what mh father told to us)
Now, suddenly, loan recovery agents have started calling repeatedly and claiming that the total amount has grown to ₹2 lakh due to interest and penalties. However, they are offering a settlement for ₹20-25k (earlier, they asked for ₹40k).
The problem is that they are not just calling..they have been harassing us non-stop, calling multiple times a day from different numbers, speaking rudely, and even trying to scare my father into paying immediately. They are pressuring him, saying that if we don’t pay now, things will get worse. Now my father suddenly broke the news he is considering paying 25k and settle things for final…( as he asked to borrow money from me)
I feel uneasy about this because:
1. Legally, can they still demand money after 13 years old loan? From what I understand, most unsecured loans in India have a 3-year limitation period, unless there was a payment or written acknowledgment, which we haven’t done in years.
2. What if we pay now and they demand more later? I read that making any payment now could be considered an acknowledgment of the debt and restart the limitation period, allowing them to chase us for the full ₹2L later.
3. If we decide to settle, what precautions should we take? Should we demand a written settlement letter before paying to avoid future issues?
Has anyone dealt with a similar situation? Should we ignore them or negotiate further? Also, how do we stop their harassment? Would really appreciate any advice.
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ULimitation period is usually started from the last acknowledgement of the loan as in the latest EMI paid or contact with the bank.
Which Bank OP?
When was the last EMI paid by you?
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UIt was HDFC bank..and i am pretty sure we didn’t pay anything in last 3 years or made any contact.. ( still i will confirm with my father)
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UYes. Confirm this. Ask your father for any settlement agreement which he says he did 7 years back.
Record everything. The bank may have initiated the recovery process itself and outsourced it to third party agents.
Any harassment or bullying about repayment of bank loans is illegal.
I wouldn’t bother with the calls. At most, it will affect your father’s credit score. The bank cannot move forward with revenue recovery because it is HDFC, as far as I know. Only government banks are eligible.
Limitations Act, 1963 says the bak can’t move forward in the court. That doesn’t mean they would stop harassing.
Even if you decide to repay, make sure to collect the loan closure receipts. Don’t go via agents. Go directly to the branch and talk with the manager but remember that if you do this, you are acknowledging the loan to the bank. Record everything up till now. Any calls harassing and abusing.
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