CC/OD Repayment

I presume that the deceased was running a sole proprietorship firm; If you peruse the bank agreement under which the bank has provided the credit, you will observe that it covers the successors also of the borrowers --- in that perspective she might be required to pay off the loan/overdraft outstandings; well, since the credit has been availed for business purpose, the recovery can be done normally through the business income; if the business is running successfully then there is no issue, the wife, if she gets charge of the business, she can avail of the credit in her own name; since cc/od is availed with a view to meet the day-to-day expenses of the business (working capital), the lady can meet the bankers and explain the situation to the bank and get their concurrence for the same after due documentation; it depends upon the lady whether she wants to continue with the business or dispose it off; if she prefers to sell of the business, then she can repay the cc/od outstandings out of the sale proceeds of the business; however, she has to obtain the bank's concurrence for the sale; in that case, i suggest that, the lady can go in for a one time settlement of the dues -- and if there any default interest or charges levied by the bank, she can request for a waiver; some experts are of the opinion that "If an individual dies while still owing money on a secured loan, such as a mortgage, the executor of the deceased’s will or his next of kin must inform the lender of the death and provide it with a copy of the deceased’s death certificate. Once the asset is assigned to a friend or family member by the executor, that individual is responsible for paying off the loan. If the deceased has no loved ones willing to take possession of the asset and the accompanying loan obligation, the lender has the right to seize the collateral due to nonpayment. A lender cannot, however, force the deceased’s next of kin to pay off the debt. " the ideal thing for the lady to do is to first negotiate with the bank for a waiver of penal interests and charges and re-work the outstandings and settle it; alternatively the lady can take up and run the business, in that event the outstandings need to be transferred in her name; What I have seen is that some unscrupulous legal advisers promise easy terms of settlement for a fee, I suggest to you not to fall for such ploys; more  

Normally, banks insist on an insurance cover in such cases. Please find out if any insurance premium was being deducted from your BIL's account or whether the bank has such a policy. more  

Unfortunately the challenge will be to manage the business in your BIL's absence ... that'll be the immediate crises to ensure that it does not collapse ... If the Business is managed OK, the Bank will not foreclose the Loan, so there is no urgency for repayment. If the business has collapsed, its important to salvage what you can from it, before allowing the Bank to enforce the sale of the property ... You need an expert to represent you / your sister with the Bank ... more  

even rahul gandhi has no solution for this the real solution lies is approaching bank and seek waiver of interest then take fresh loan from PM Yojna which is lower to resolve the issue as per policy for such loan bank take insurance too hope in yr case it has been taken if not certainly lapse from bank then it is their funeral more  

Yes already a common practice is running for taking insurance over loan amount. This is suggested by banks in favour of customer and purchased by borrower. So consult Bank to get insurance claimed and free the papers of p property and all others of any. more