What is the Punishment for Credit Card Defaulters in India?

Maintaining a credit card might sound hard but it is actually not. My friend hails from a good family and had a credit card once but I can't explain how much struggle she had to face for failing to pay the debts on time. Thank the gods that she did not have to go through the

maximum punishment for credit card defaulter. Do you even know what it is? Probably not, so let me share what she did and the consequences.

A credit card defaulter is the person who fails to pay the credit card bills on time, within 6 months to be precise. Now many of us think it is okay without even knowing what is the punishment for Credit card defaulters in India. 

My friend’s card got blocked or maybe frozen by the bank and she could do no further transactions then. Trust me unblocking it is hard since you have to go through so much verification processes and fuss.

But blocking is not the sole punishment here. One can even be jailed for it. Yes it's true. If the debt collectors file a case against you for not paying the bills, you can go to jail. Serious legal actions can be taken against you and in many cases the debt collectors get the favors and it becomes hard for the defaulter to get out of it.

Going to jail is the maximum punishment for Credit card defaulter in India so it's better to pay the bill on time and get rid of any future problems.

A credit card default happens when you go a long time without making any payments on your outstanding credit card debt. If you don't pay the minimum amount due on your credit card for more than six consecutive months, you risk being added to the defaulter list and having your credit card account cancelled right away. One must adhere to certain standards that is ascertained by the Supreme court judgement on credit card defaulters.

What happens if credit card not paid for more than 2 years in India?

Your credit card will be in default if you consistently miss the minimum payment by at least six months. In such circumstances, your credit card company will initially call you and deliver a number of notices via email or SMS, requesting the payment. They will shut your account and notify the credit bureaus of the default if the payment is not made within the allotted time.

Depending on the credit card company, this time frame may change. Your credit score will likely be impacted by this, making it more challenging for you to secure future loan approvals. Any credit obligation becomes risky for you after your name is recorded as a credit card defaulter.

What if I don t pay credit card bill?

You will incur late fees, higher interest rates, and your credit score may suffer if you don't pay your credit card bills on time. Your credit card could get stopped, your debt could be sold to a collection agency, and the debt collector can possibly file a lawsuit against you if you keep missing payments.

Indian banks have the authority to take legal action against credit card defaulters in India when it comes to credit card debt.

This involves starting a criminal investigation or bringing a civil lawsuit. In order to recoup the money they are due, banks can also use debt recovery tribunals.

A fine, imprisonment, or both could result from this. Banks can initiate a civil lawsuit against the defaulter to recover their debts in addition to initiating criminal actions. You can be required to pay compensation and/or be awarded damages if the court determines in the bank's favour for the loss the bank suffered as a result of your delinquency.

• The loan becomes an NPA of the bank in the case of an EMI default. In that case, the loan recovery department can start getting in touch with the credit card defaulter and asking them to pay the loan dues as soon as possible. 

• The cardholder cannot be called at unusual hours or harassed by debt collectors requesting payment for credit card debt.

• The owner of the credit card may complain to the bank in the event of a violation.

• The bank is required to look into complaints made against recovery organisations. 

• If there is a death in your family or another such tragedy, you might instruct the agent not to call or visit you for a few days.

I’d like to conclude my answer here about the Supreme court judgement on credit card defaulters. I hope this helps:)

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If you don’t know about credit card defaulter punishment in India, you must definitely make yourself aware of it. I can tell you that there are many legal provisions that allow banks to take legal action against such defaulters. These provisions can range from starting criminal proceedings to filing a civil suit against the defaulter in a court of law.

Credit card defaulter legal action in India

As I already told you banks can take legal action against the defaulter of a credit card by filing a civil suit and starting criminal proceedings, or by way of making use of other debt recovery tribunals.

So, as you can make out, this can lead to a fine or imprisonment, or both. 

Supreme court judgement on legal action for non payment of credit card:

• In the situation of an EMI default, the loan represents an NPA of the bank. In that case, the loan recovery department can start getting in touch with the credit card defaulter and ask them to pay the loan dues as soon as possible. 

• The cardholder cannot be contacted by debt collectors at odd hours or subjected to harassment in order to recover a credit card debt.

• The owner of the credit card may complain to the bank in the event of a violation.

• The bank must investigate any grievances brought against recovery organisations. 

• If there is a death in your family or another such tragedy, you might instruct the agent not to call or visit you for a few days.

Now you know

credit card defaulter punishment in India.

What happens if you default on credit card payment? Let's discuss.

Credit card defaulters can face consequences like legal actions and financial penalties. 

• Credit card companies can impose late payment fees and additional interest charges on your outstanding balance for delayed payments.

• It can also significantly impact your credit score. It can affect your ability to obtain credit in the future like loans and other credit cards.

• Credit card issuers may take legal action to recover the outstanding dues.

• It can also impact the defaulter's credit history.

• The credit card issuer may attempt to seize your assets to recover the outstanding amount.

• Credit card issuers may engage third-party debt collection agencies to recover the dues. These agencies can use various methods to collect the outstanding dues.

I hope you have understood

what happens if you default on credit card payment.

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