One layoff. 3 missed EMIs. Bengaluru CA shares how her neighbour lost Rs 1.2 crore flat

A single job loss can destroy years of careful financial planning, as illustrated by a Bengaluru resident whose story was shared by Chartered Accountant Meenal Goel on social media. The CA's neighbour, who had worked for years, lost his Rs 1.2 crore flat after missing just three EMIs. The bank acted swiftly under the SARFAESI Act, a legal provision allowing lenders to recover loans without a court order. Within 60 days of issuing the notice, the property was auctioned at Rs 95 lakh. The bank recovered its outstanding Rs 80 lakh, leaving him with only Rs 15 lakh after eight years of payments—a shocking reality for anyone who believes that home ownership is fully theirs once they move in.

According to Goel, her neighbour had everything seemingly in order: a steady job, a good salary, and a home in a prime area. But when he was laid off in October, the situation escalated quickly. By January, missing three EMIs triggered a bank notice, and within weeks, the home was under auction. Goel pointed out that until the last EMI is paid, a home remains effectively controlled by the bank, with the borrower vulnerable to sudden financial shocks.

Banker friend's advice

To understand alternatives, Goel consulted a banker friend, who outlined several measures that could help prevent such a scenario.

- The first is to approach the bank proactively before defaulting. Lenders often restructure loans for borrowers with a good credit history facing genuine hardships, such as job loss or medical emergencies.

- Another option is to stretch the loan tenure, reducing EMIs to a sustainable level—financial planners suggest EMIs should not exceed 40% of one’s income. Borrowers can also tap into provident fund contributions, which allow withdrawals of up to three years’ worth of contributions to cover loans in emergencies.

- Finally, selling the property independently is often more profitable than letting the bank auction it, as banks prioritise recovery over achieving market value.



Goel’s post serves as a cautionary tale: even the most disciplined borrowers are exposed to unexpected risks. Before signing a home loan, one should ask a critical question: Can I survive six months without income and still pay EMIs? If the answer is no, home ownership could become a gamble with potentially devastating consequences.