Understanding the Legal Actions Banks Can Take Against Credit Card Payment Defaulters
The maximum legal action a bank can take against a credit card payment defaulter in India is to file a case under Section 138 of the Negotiable Instruments Act, of 1881. This section deals with dishonour of cheque for insufficiency of funds. If the court finds the defaulter guilty, they may be sentenced to imprisonment for up to two years, or a fine of up to twice the amount of the cheque, or both.
In addition to filing a criminal case, the bank can also take civil action against the defaulter. This may include filing a suit for recovery of the outstanding amount, along with interest and costs. The bank may also obtain a decree from the court, which would allow them to attach the defaulter's assets in order to recover the debt.
It is important to note that the bank will not take legal action immediately upon default. They will typically first try to recover the debt through other means, such as sending reminders, making phone calls, and offering settlement options. However, if the defaulter fails to make any payments, the bank may eventually resort to legal action.
Therefore, it is important for credit card holders to make their payments on time. If you are unable to make a payment, you should contact the bank immediately to discuss your options.