Steps a borrower can consider early, before enforcement begins. General legal information only.
Talk to the lender early
Lenders often prefer a workable arrangement to prolonged recovery. Write to the lender, explain the cause of the difficulty and propose a realistic plan. Keep copies of everything.
Options that may be discussed
- Restructuring or rescheduling of repayments, where the lender’s policy and regulatory norms allow
- One-time settlement of the dues on negotiated terms
- Sale of the asset by the borrower with the lender’s consent to clear dues
None of these is a right. They depend on the lender’s policy, the account’s status and the regulatory framework in force.
Protect your position
- Do not ignore notices. Note the date each is received.
- Check the statement of account and ask for a breakup of charges.
- Do not transfer or dispose of the secured asset without advice.
- Get any settlement recorded in writing, with a clear closure letter.
If enforcement has begun
See the borrower’s guide to a SARFAESI notice for time limits.
Related: Debt recovery and SARFAESI · All debt recovery guides · Send an enquiry
Important disclaimer: This article is general legal information, not legal advice. It does not create a lawyer-client relationship and is not an advertisement or solicitation under Bar Council of India rules. Verify current statutes, rules and judgments before relying on it.
