what is the legal standing point here?
can debt be recovered from family members or not?
Depends. That is how secured and unsecured loan types come into play.
Secured loans like mortgages and FD-backed cards, can be recovered by family members since they are the next legal heirs of the same or there is a guarantor. And in the case of FD cards, you are using the limit amount in relation to the FD, which will be ceased and recovered.
Credit score + income criteria loans and
credit cards come under unsecured loans. And the reason banks give unsecured loans is because they have higher interest rates, making them risky yet lucrative. Recovery can be done in the loan taker's name only that too he can refuse and show the middle finger(will come with future problem though). But their family members are not at all liable to pay.
That doesn't mean banks won't try underhand tactics to recover the amount from family members using their lack of knowledge, pressure by constant calls, guilt shaming, and emotional drama. But the family has the full right to refuse to pay the amount as it's not directly in their name. But the downside is, you will face problems getting a loan or CC in the future. Since banks have all rights to do risk analysis and when they find that one of your close family members(father, mother, or spouse) is a defaulter and hasn't paid they will also see you as a liability too, to give out a fresh loan (Basically, what to confirm you won't do the same, even if current CIBIL is good).
https://m.economictimes.com/wealth/...nt-after-their-death/articleshow/92095631.cms
