How To Remove Suite Filed Cases In Cibil Report
Introduction
The world of credit in India is governed not just by your repayment history but also by legal actions that financial institutions may take when loans go unpaid. One such critical notation is the “suit-filed” remark in your CIBIL report. If you’ve checked your credit report and found this term, you’re not alone—but it’s crucial to understand its full implications.
This comprehensive blog aims to decode everything about suit-filed cases in the context of CIBIL and Indian credit bureaus—what they mean, how they are filed, how they affect your creditworthiness, and what you must consider if one is listed against your name.
What is a Suit-Filed Case in CIBIL?
A suit-filed case refers to a legal action initiated by a financial institution (banks, NBFCs, credit card issuers) against a borrower due to default on repayment. When the borrower fails to pay back the loan amount, even after repeated reminders and recovery attempts, the lender may choose to file a legal suit under relevant sections of law, such as the SARFAESI Act, DRT proceedings, or civil recovery suits.
Once this suit is filed, the lender reports it to credit bureaus like CIBIL (Credit Information Bureau India Limited), which reflects it in the borrower’s credit report. This is a red flag for any future lending activity.
Why Lenders File a Suit?
There are several reasons why a lender may escalate a default to a legal suit:
- Long-term default (typically 90 days or more)
- High outstanding amount
- Non-cooperative borrower
- Legal obligation or requirement under bank policy
- Exhaustion of other recovery mechanisms such as collection calls, notices, or emails
Once legal action is pursued, it becomes part of your credit history.
How is Suit-Filed Information Reported in CIBIL?
Once a legal case is filed, the bank or NBFC reports the following details to CIBIL:
- Account Number
- Loan Type (Personal, Home, Business, etc.)
- Amount Involved
- Date of Suit Filing
- Court Name
- Case Number (in some instances)
- Status (Pending/Settled/Withdrawn)
- Remarks: “Suit Filed” or “Wilful Defaulter”
This information is then stored under your credit report and remains visible to all lenders accessing your report.
Does a Suit-Filed Case Mean a Criminal Offense?
Not necessarily.
In most cases, suit-filed refers to civil litigation related to loan defaults and not a criminal charge. However, in certain scenarios—like cheque bounce cases under Section 138 of the Negotiable Instruments Act or fraudulent documentation—it can be escalated to a criminal case.
Civil suits typically aim at recovering the dues legally, which may include property seizure, salary garnishing, or freezing of bank accounts.
Duration of a Suit-Filed Remark in CIBIL
A suit-filed status can remain on your report for several years, depending on the outcome of the case and the reporting frequency by the lender. Even if the case is resolved in court or settled between the borrower and lender, the remark might stay unless the lender updates the status and reports it as “closed” or “withdrawn.”
The remark generally affects your credit profile for up to 7 years from the date of last reporting.
Types of Legal Recovery Actions Leading to Suit-Filed Tags
1. SARFAESI Act Recovery
If a borrower has secured assets, the bank can enforce recovery without court intervention using the SARFAESI Act. However, in complex cases or disputes, the bank may file a civil suit in parallel.
2. Debt Recovery Tribunal (DRT)
For dues exceeding ₹20 lakh, banks can approach the DRT. A DRT suit is typically filed for large commercial or secured loans. These suits are formally reported in CIBIL.
3. Civil Court Recovery
In unsecured loan cases (e.g., personal loans or credit cards), the bank may file a recovery suit in a local civil court. These too are shared with credit bureaus as suit-filed accounts.
4. Criminal Proceedings for Wilful Default
In rare and severe cases, if a borrower is found to have intentionally defaulted despite capacity to pay, they may be declared a wilful defaulter, with legal consequences including criminal prosecution.
Impact of Suit-Filed Cases on Your Credit Report
A suit-filed remark is a major red flag and drastically reduces your creditworthiness. Here’s how:
✅ CIBIL Score Drops
Your score can drop significantly (often below 600), making it nearly impossible to obtain fresh credit.
❌ Loan & Credit Card Rejections
Most banks and NBFCs have automated underwriting filters that reject applicants with legal suits reported.
🏦 Reduced Loan Limits
Even if you manage to get a loan from fintech or private lenders, the amount and tenure may be severely limited.
💸 Higher Interest Rates
Alternative lenders who still consider such profiles often charge high interest rates (24%–36%) due to increased risk.
🔍 Loss of Financial Trust
This mark significantly damages your credibility in the financial ecosystem—including potential employers and business partners (in case of business loans).
Difference Between ‘Suit Filed’ and ‘Written Off’
| Parameter | Suit Filed | Written Off |
|---|---|---|
| Legal Case Filed? | Yes | No |
| Impact on Credit Score | Very High | Moderate to High |
| Recovery Action | Through Court or DRT | Referred to collections or sold to agencies |
| Can Still Repay? | Yes, but through legal settlement | Yes, often via settlement or full payment |
| Duration on Report | 7 years or more | 7 years or less |
How Do Lenders Treat Suit-Filed Applicants?
Most traditional lenders (banks, NBFCs) have zero-tolerance policies for suit-filed applicants. You are often treated as a high-risk borrower, and your application may be auto-rejected.
Even after settlement, you may be asked to provide:
- NOC (No Objection Certificate) from the lender
- Court settlement documents
- Updated credit report
Hence, it’s crucial to manage legal outcomes properly even if the debt is settled.
Important Legal Terms Related to Suit-Filed Cases
| Term | Meaning |
|---|---|
| Pending | The suit is still being heard in court |
| Settled | The borrower and lender reached an agreement and resolved the dispute |
| Decreed | Court has passed a judgment (often in favor of lender) |
| Withdrawn | The lender has withdrawn the case |
| Wilful Defaulter | Borrower has intentionally defaulted with means to pay |
| DRT Case | Case filed with Debt Recovery Tribunal (for loans above ₹20 lakh) |
Can a Suit-Filed Borrower Get a Loan in Future?
Yes, but with great difficulty. You may still qualify for loans from:
- Private lenders or fintech NBFCs (on strict terms)
- Gold loans or secured loans (against assets)
- Salary-deducted credit lines (if employed)
However, traditional loans like home loans, credit cards, or personal loans from top banks will remain out of reach until your legal status is cleared and credit report is updated.
Preventive Tips for Borrowers
Even though this blog avoids the actual dispute process, here are some general preventive measures:
- Never ignore legal notices from your lender
- Communicate regularly and keep records of all interactions
- Avoid bouncing EMIs repeatedly; one or two can trigger legal action
- Seek professional credit advice before things escalate
Call to Action – Rebuild with Experts
If your credit report shows a suit-filed status and you’re struggling with loan rejections or financial pressure, CrediBoost Solutions Pvt. Ltd. is here to help.
We offer professional services in:
- Credit Health Assessment
- Financial Counseling
- Loan Consultancy (DSA)
- Income Tax & GST Filing
Let us help you assess your credit position and provide the right steps for recovery and future planning.
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