DEBT COUNSELLING: VN Kulkarni

I am a working woman with a monthly salary of Rs 30,000. I have a heavy debt burden. It started when I breached the credit limit on two cards about two years back. Following this, I started taking personal loans to pay off the debt and also kept applying for new cards. Currently, I have to pay around Rs 25 lakh debt. This includes outstandings on seven cards and 12 personal loans. I can devote a large chunk of my income towards this payment as I am married and my husband has a well-paying job. But my lenders have reached my office and are threatening to inform my director about this. I will lose my job if this happens. I can't even tell my husband about this. Our marriage can break. How can I restructure my loans?
You have two apprehensions in your mind. One, your husband may not appreciate your overspending and the present debt trap. You also feel that your marriage may break. Second, if the director of your company comes to know about your huge debt, you may lose your job.

Today or tomorrow, both of them will come to know about your debt problem, if not the magnitude, as recovery agents adopt all tactics for recovery dues. Instead of your husband coming to know about this through some third party, it is better you talk to him and clarify how you got into the debt trap and the present position.

Perhaps, he will try to help you out as he is drawing a good salary. Presently, there are no specific guidelines for restructuring of individual debt. Banks may or may not allow restructuring of debt. A few of them may even offer one-time settlement. But you need to arrange funds. Please do bring to the notice of the banks your present financial condition and request them to restructure your total debt. This will result in a reasonable interest charged on your credit card debt.

Indicate how much amount you will be able to pay, so that the banker may think of giving you a reasonable period for recovery. Please be careful about the cheques which you have given to the banks while availing of the personal loans, as bouncing of cheques may invite initiation of criminal action against you. The best way will be to approach a credit counsellor who will guide you about whom and how to approach.

I lost my job recently. I had taken a home loan eight months back. I am sure I will find a job within three months. Can I request my bank to restructure my debt payments? How should I go about it?
From your letter, it is not clear how many equated monthly instalments are pending. Your account will be treated as out of order if you do not pay till 89 days. Thereafter, it will be treated as a non-performing asset. You should approach your banker and keep him informed of your present problems. At least some hasty decision such as initiation of action under SARFAESI Act 2002, etc, will not be taken if you do not pay your instalments beyond three months. Be in touch with your banker and keep him informed.

Vinod Kulkarni is chief counsellor at Abhay Credit Counselling Services.
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