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How To Defend Attachment Of Vehicle By Bank In Loan Default?
I'm a senior citizen and I had taken a loan for a car. I have repaid 90 percent of the car loan but little irregularly, and have been fined many times. I'm an old woman having health troubles so I've been repaying irregularly, but recently I underwent angioplasty and paid the bills with what I saved. I informed my bank about the issue and asked for time, but they are calling me continuously and messaging me that they will file a complaint on my vehicle. What can I do?
- Sector-1, Noida
Rights of Every Loan Defaulter:
- Communicating with the Bank - To be allowed to communicate with the lender is the right of any Defaulter. The Bank is bound to behave civilly in this case. The Banks are expected to understand the difficulty of the borrower if the case is genuine and he/she is not able to pay the EMIs due to some valid reason. One can try to talk about increasing their loan tenure which will result in a reduction in the monthly EMI. One may also approach the bank and ask them to restructure their loan.
- Right to Ample Notice - Any default in case of any kind of loan does not strip you of your rights and this doesn’t make you a criminal. Banks have to follow the process and are bound to give you time to repay dues before repossessing or reselling your assets to realise the arrears. Generally, banks start any kind of legal proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act. If the borrower’s account is classified as a non-performing asset (NPA). This happens when a borrower is defaulting on his/her payments from the last 90 days i.e. 3 months. In this case, the Bank has to first send a legal notice of 60 days to the defaulter.
- Right to Ensure Fair Value - When the defaulter is not able to clear the outstanding amount even after the 60 days’ notice period then the lender has the full authority to take legal action and sell the property which was given as collateral against the borrowed amount. There also before the Auction- the lender needs to fix the value of the property and had to talk once with the defaulter. The auction can be stopped if the defaulter has a better plan to repay the outstanding amount.
- Right to be Heard - During the notice period of 60 days, the defaulter has the full authority to visit any authorised officer, advocate etc. regarding the notice and he/she is authorised to make legal objections to the notice proposed by the Bank.
- Right to Humane Treatment - Banks are regulated entities and they can’t behave inhumanly like the local moneylenders who try collect dues in one way or another. Behaving inhuman by the bank is a criminal offence. The banks need to follow all the rules and regulation which is made by Reserve Bank of India in order to do the recovery too. Banks have no right to harass and humiliate any defaulter.
Hence, paying your EMIs timely is the only option to avoid such a situation. Don’t go for any loan which you can’t afford. If in case you are unable to pay the EMIs first talk to your lender and then take any decision.
Answered on 30 Aug 2019
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