How To Remove A Suit Filed In CIBIL

Learn how to remove a suit filed in CIBIL with our step-by-step guide. Find out what you need to do to clear your credit record and improve your credit score

18 Apr,2024 12:57 IST 2958
How To Remove A Suit Filed In CIBIL

A lawsuit filed against you can give you jitters and nightmares. Foremost, you should find out the court where the lawsuit would be heard. If it is filed in CIBIL, then you must take measures to get the litigation deleted from CIBIL. This blog will guide you about how to get your lawsuit removed from CIBIL without affecting your credit score.

How Does A CIBIL Suit Work? What Is It?

A suit is a legal action that the lender takes against the borrower in case of missed loan payments. The missed loan payments could be due to several reasons such as intentional default, financial constraint, etc. The lender after filing a suit in the court notifies CIBIL about the suit.

When CIBIL indicates a loan as having a lawsuit, the defaulter should close the loan. The defaulter should close the loan account by making a full payment towards the balance loan amount and pay it to the lender. The status of the loan should be updated as closed. The borrower should avoid one-time settlement with the lender. On settling a loan account, the CIBIL report shows the loan account as settled and negatively impacts the CIBIL score and credit report. A settled comment on a CIBIL report lowers the credit score.

Creditors or debt collectors may use CIBIL suit to retrieve the amount of overdue debt. The CIBIL report will reflect the loan that had lawsuit filed against it for seven years after it was submitted to CIBIL. Your loan taking ability and availing credit cads and other financial goods will be hugely impacted by this.

You can present your case in court by outlining your inability to repay the loan amount you took out in order to deal with a “Suit Filed in CIBIL” account.

How To Get A Mistakenly/ Unfairly Suit Filed In CIBIL Against You Removed?

There are certain measures that you can take in order to remove a lawsuit filed in CIBIL against you mistakenly or unfairly.

You should get in touch with the credit bureau and give them in writing your dispute. Within 30 days of receiving the dispute, the credit bureau will look into your matter and if you are not found defaulter they will update your credit record.

Next, you should explain to the lender why you think the lawsuit filed against you is unfair and erroneous. In order to avoid the legal proceedings, the lender might accept the settlement proposal. This settlement proposal can include the clause of removing the lawsuit from the credit report.

While you take these steps to delete the lawsuit from your credit report you should be patient at all times as these processes takes time. You may get a legal counsel for the same if you have any concerns regarding your rights and obligations. Finally, safeguarding your credit score and deleting a CIBIL suit from your credit report requires that you be aware of your rights and take appropriate actions.

What Are The Consequences If Suit Filed Remains In Your CIBIL For An Extended Period Of Time?

CIBIL lawsuit reflecting in your credit report for a long period of time can have negative repercussions on your financial health. It could make you appear as a high risk borrower and lenders might not approve your loan application or give you a loan at a high rate of interest or both. It may also make it difficult for you to get a job, a house on rent or a cell phone contract approval.

Will It Be Helpful?

Paying the lender a settlement sum and avert additional legal actions is beneficial and advisable but generally coming to a mutual decisions in such cases takes a long time. A faster and better option is to go in for out-of-court settlement. Although this settlement will be reflected as ‘settled’ in your credit report but still it is advisable to go in for this kind of settlement.

The principal amount and any interest costs are usually a part of the settlement amount, it is still less than the balance you owe to the lender. Since you have partially paid the debt and not entirely, there will be a negative entry in your credit report for the next seven years.

What Is The Expected Time Frame In Suit Filed In CIBIL?

In case you opt for legal proceedings then it the length of time solely depends on the court proceedings. It usually takes 30-45 days. You may also opt for out-of-court settlement with the lender as it takes less time. Suit filed cases are black marks on the credit report; hence you should manage your finances well in order not to skip any loan payments

What Should You Do If A CIBIL Lawsuit Has Already Been Filed Against You? How Can You Avoid Having One Filed Against You In The First Place?

You should manage your finances keeping in mind the debt payments. Make sure you make timely payments and in its entirety. In case you are not able to do so, let your creditors know as soon as possible. They might give a solution to your problem that suits both the parties and develop a plan to assist you in repaying your debt.

In case a CIBIL suit has already been filed against you, you should speak to your lender and explain your circumstances. You should contact your credit bureau for any errors reflecting in your bill.

You may take a legal advice from a lawyer regarding safeguarding your credit score in such a situation.

How to remove a suit filed in CIBIL Against You

A suit filed in CIBIL against you can negatively impact your credit score. If you believe it's a mistake, here's how to get it removed:

Dispute the Claim with CIBIL:

File a dispute online or through mail with CIBIL highlighting the error. Explain why the CIBIL suit filed is unfair and provide any supporting documents.

Contact the Lender:

Reach out to the lender who filed the suit. Explain the situation and negotiate a settlement. Settling the debt may prompt them to withdraw the suit, leading to an update in your CIBIL report.

Seek Legal Advice:

If the suit filed in CIBIL remains unresolved, consider consulting a credit lawyer. They can guide you through the legal process and ensure your rights are protected.

Maintain Records:

Throughout this process, keep copies of all communication and documents related to the CIBIL suit filed. This will be crucial for any future reference.

Remember, this process may take time. Be patient and persistent in following up with CIBIL and the lender.

Did You Know About Willful Defaulters?

These are the defaulters who choose not to make loan payments even though they are financially capable of doing so. The lender may file a suit against them.

Conclusion

Before availing a loan you must be sure of your repaying capabilities in order not to default later on. The loan account falling under ‘suit filed’ category makes a bad mark on the credit report. You will be treated as a high risk borrower and might not get your loans approved. You may get a loan at a significantly higher rate of interest. The remark of ‘suit filed’ in your credit report will hamper your credibility for the next 7 years.

You can opt for out-of-court settlement or talk to your lender about your circumstances to delete suit filed in the CIBIL.

A high score can help you take out a variety of loans for personal or business purposes from IIFL Finance swiftly and without any hassles. IIFL Finance, India’s leading loan provider, offers gold loans, personal loans and business loans with the most competitive interest rates to people with strong credit scores.

Frequently asked questions

Q1. How can I check if I am there on the CIBIL defaulters list?

There actually isn't a CIBIL defaulters list to check. Instead, lenders rely on your CIBIL score, which reflects your credit history. You can access your CIBIL report to see a detailed record of your loans, credit cards, and any defaults. This report will show if you have missed payments, which can lower your score. To check your CIBIL score, you can visit the CIBIL website and get a copy of your report for a minimal fee.

Q2. How can I remove my name from the RBI defaulter list?

The RBI doesn't maintain a public defaulter list. Loan defaults are reported to credit bureaus like CIBIL. If you believe you're wrongly listed as a defaulter, clear your dues with the bank. Once you settle the outstanding amount, approach the bank for a No-Objection Certificate (NOC). This NOC can then be submitted to CIBIL to initiate the process of correcting your credit report.

Q3. Can we delete CIBIL history?

No, deleting your CIBIL history isn't possible. It acts as a record of your credit behavior and helps lenders assess your trustworthiness. However, positive actions like on-time payments for future loans and credit cards will improve your score over time. Negative information remains for 7 years, but its impact on your score lessens as time passes. Focus on building a good credit history for better loan opportunities in the future.

Q4. How can I check if someone took a loan in my name in India?

To check for unauthorized loans in India, monitor your credit report. You can get a free report annually from each of the four credit bureaus (CIBIL, Experian, Equifax, and Crif High Mark). These reports list all loans associated with your PAN card. Any unrecognized loan indicates potential fraud. If you find something suspicious, dispute it immediately with the credit bureau and report it to the authorities.

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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