Legal Case For Credit Card

A credit card default would happen when one abstains from paying for a long time on the outstanding credit card debt. In case one does not pay the minimum amount which is due on the credit card for a period of more than six consecutive months, he or she risks getting added to the defaulter’s list and having their credit card account cancelled. Therefore, one must follow the  certain standards which have been provided by the Supreme court judgement related to the credit card defaulters.

If no payment has been made on the credit card for more than 2 years

The credit card would be in default in case one consistently misses paying the minimum payment for at least six months. In this situation, the credit card company would initially call and deliver notices through email or SMS and request you to complete your payment. The bank would then  shut your account and also notify the credit bureaus about the default when the payment is not made within the time period provided.

The time period mentioned above may vary based on the credit card company. It must be noted that the credit score would likely get impacted in this situation, which would make it more challenging to secure future loan approvals. Credit obligation would become risky after one has his or her name recorded as a credit card defaulter.

If credit card bill is not paid

In case a credit card bill is not paid on time, it would result in late fees, higher interest rates, and the credit score would also suffer. Also, the credit card can get stopped, or in worse case the debt would be sold to a collection agency, in which situation the debt collector could possibly file a lawsuit in case the credit card owner keeps missing payments.

If a bank could file a case against the credit card defaulter?

In India, the banks have the  authority of initiating legal action against such credit card defaulters, in case of credit card debt.

Legal action for non-payment of credit card in India

In case of non- payment of credit cards in India, a criminal investigation could be started or a civil lawsuit could be initiated as well. In order to regain the money which is to be paid, banks could also apply to the debt recovery tribunals, which may result in fine, imprisonment as well.

Banks may also initiate civil lawsuits against the credit card defaulter to recover their debts as well as initiate the criminal actions. One would have to pay compensation and/or will be sentenced to pay damages in case the court determines the case in the favour of the bank, for loss which was suffered by the bank as a result of delinquency on part of the defendant.

Supreme court judgement on the credit card defaulters

• The loan would become a NPA for the bank if there is an EMI default. In such a situation,  the loan recovery department would contact the credit card defaulter and ask them to pay their loan dues urgently.
•  Cardholders shall not be called at unusual hours and should not be harassed by  the debt collectors requesting the payment of the credit card debt.
• The owner of the credit card would have the right of complaining to the bank in case of a violation of the above mentioned terms.
• The bank would have to look into the complaints filed against the recovery organisations. 
• In case of a death in the family or any other tragedy, one may instruct their agent to not to call or visit for a few days.

Conclusion

In conclusion, it could be said that if one continues to miss payments to his or her credit card, their card could be frozen, as well as the debt can be sold to a collection agency, leading to which the collector of the debt will have the right to sue you. Also, legal action could be taken in the court of law for payments related to the credit card payment default, thus filing a civil suit. 

In case you have received a legal notice for credit card default payments, or any other situation related to credit card debt, it is advised that you seek proper legal assistance from an experienced advocate so as to have a better understanding of the legal procedures as well as your rights in such conditions.

Lead India offers you a team of experienced advocates who have been successfully handling cases related to bank frauds, cheque dishonour, etc. Thus, if you wish to talk to a lawyer or seek free legal advice online, you may contact us.