What happens if someone took a personal loan and credit card loan from a bank in India and couldn’t repay due to financial difficulties? If the bank sent notices for a while but didn’t file a lawsuit, what legal steps can they take after 8 years? If the borrower wants to settle the loan by paying a minimal amount they can afford, what decision might a court make if the bank files a case against them?

Under Indian law, a bank can file a civil suit to recover the loan amount within a period of three years from the date of default. After eight years, the bank’s right to sue may be barred by the Limitation Act, 1963, depending on the specific circumstances. If the bank files a case and the borrower offers a minimal settlement, the court may consider the borrower’s financial situation and the amount of time passed, and may accept a settlement amount if it’s deemed reasonable and the bank agrees.