Some years ago my husband took a personal loan as he was in dire need as his mother needed serious medical attention and he had already maxed out his yearly medical insurance of 4,00,000. In spite of all our attempts and the best medical care (several operations and long stays in the hospitals) my mother-in-law's health only deteriorated as she had developed several complications and her illness eventually took her away from us in about 4 years of her falling ill. While this was a big loss to us, we were also upto our head in debt (another additional personal loan and credit cards) by the time God took her away from us due to having to pay her hospital and medical bills.
He was able to pay up one personal loan however he is still paying towards his credit cards and trying to make the minimum payments (at the least). However, he has defaulted on one loan (loan taken was 3 lakhs however with interest and due to non payment of emi's all these years it is around 5 lakhs now) and the bank had initiated recovery proceedings. He tried to negotiate the repayment/ settlement however, the recover agent/s were very abusive and non relenting. Stating all the time that no negotiation is possible and he would have to make the complete payment (actual principal due plus interest).
He has until now been somehow avoiding these recovery agents however, since recently getting to know that the bank has initiated legal proceedings against me (his wife as they have not been able to locate him), I recently received a call stating a legal notice has been issued against my name and I need to appear in court in this regard), he is very upset and does not know how to address the issue at hand. We have given it a thought of approaching the Bank directly and requesting to negotiate a repayment plan that would help him to start paying back the bank but we don't know the legal way of going ahead with this and at the same time ensuring that the bank's recovery agents don't find out where we live and start making life hell for us all over again.
I need your help in understanding a few legal options....
1. Can the Bank initiate legal proceedings against me for an unsecured loan taken by my husband?
2. If we want to approach the bank directly, how should we go about doing it?
3. Is it possible to negotiate starting the repayment of the emi's on the original loan taken from the bank and request the bank to drop the interest incurred during the non payment phase?
4. Can we approach someone within the legal system to help us negotiate with the bank?
5. We have all intentions to pay back the bank however, fear the ramifications of identifying ourselves/current address as (maybe) on doing so the recovery agents would once again make our lives a hell with their treats, recovery calls and visits. Is there some legal option available to us?
We don't own any assets (house, car or jewellery) as we are from the lower middle class and all our hard earned money goes into paying up on maxed out credit cards, house rent, daughters college education and our daily needs. However, we do realize that we need to pay our debts and together (my husband and I) are willing to go to the extra mile (overtime, etc.) to get rid of the burden of this loan. We need some legal advice on how to proceed and have turned to you'll for help. Please advise us on the right way of handling this issue. Thanks.