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I Did Not Paid My Loan And My Cheque Bounced. What Legal Action Company Can Take Against Me

  • Writer: Lead India
    Lead India
  • Aug 21, 2023
  • 3 min read

Loans have grown into a necessary element of our lives in today's complicated financial environment, assisting us in meeting a variety of requirements and objectives. The lending business may take legal action if loan payback conditions are not met, which could have serious repercussions. Borrowers might discover themselves facing a variety of potential legal remedies when payment of a loan is missing and a cheque bounces.



Kinds of Legal Actions taken by the Company

The legal actions that a company may take against a borrower whose cheque has bounced and who has not repaid their loan are as follows-

  • Sending Legal Notices- The lending firm usually starts the procedure by sending the borrower a number of legal notices when they fail to make a loan installment payment. These letters act as formal notices advising the borrower to settle the loan. Initial notices frequently include information about the outstanding balance, the date it is due, and a review of the loan agreement's terms and conditions.

  • Sending Demand letters- If the borrower decides to disregard the reminders, the lending company may take additional action by sending a demand letter. This letter mandates quick repayment of the outstanding loan sum as well as any accumulated interest or penalties. It also discusses the effects of persistent non-compliance, particularly potential legal effects.

  • Taking Legal Action-The loan company may opt to sue the borrower if they don't answer. In order to do this, you must go to court and ask for a judgment for the outstanding debt. The borrower can be ordered to repay the money if the lending company prevails in court.

  • Seizure of Assets of the Debtor- The loan company may request that the court take and sell the borrower's assets in order to recoup the unpaid debt. This can apply to priceless possessions like real estate, automobiles, or other vehicles.

  • Retaining the Salary- The Company, in certain situations, may ask the court to grant permission for the extraction of a specific sum from the borrower's wages. This specifies that a specific amount of the borrower's income will be used to pay back the loan before they receive them.

  • Negative Effect on Score of the Credit- A borrower's credit score may dramatically decline if they are unable to repay a loan. Having access to credit facilities, later on, could make it more challenging for someone with a low credit score to obtain debt or credit cards. Before providing financial aid, lenders often check a person's credit history, and a low credit score may mean exorbitant interest rates or loan refusal.

  • Agencies for Assembling of Debts- Lending companies may engage outside debt collection companies to collect unpaid debts on their behalf. These firms employ a variety of strategies, such as getting in touch with the debtor by phone, mail, or email. Considering their tenacity, these companies must follow the rules that apply to debt collection.

  • Civil litigation and Court rulings- In the event that the lending company's attempts to collect the debt are unsuccessful, it may decide to sue the borrower in civil court. If the borrower wins, the court may impose a judgment on them requiring debt payback. Severe repercussions, including possible liens on properties and other assets, may result from this verdict.

  • Bankruptcy Procedures- In extreme circumstances, a borrower who is drowning in debt may declare bankruptcy. Although bankruptcy provides a new start in terms of finances, it also has long-term repercussions, such as a significant adverse effect on creditworthiness and the potential for asset disposal.

You will need the help of lawyers to draft a Legal notice for non-payment of the loan. To legally notify the person who defaulted on the dishonoured cheque and anticipated legal measures if the situation is not remedied swiftly, a lawyer helps to send a cheque bounce notice. They can assist you in drafting a Legal notice for cheque bounce as and when required.

One can talk to a lawyer at Lead India for any type of legal assistance. In India, free legal advice online is achievable at Lead India. Along with getting free legal advice online, you can also ask questions to the experts online free through Lead India.


Call Us: +91–8800788535

Email: care@leadindia.law


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