If you have defaulted on loans or credit card payments and the bank filed a cause against you and taken legal recourse that resulted in imprisonment or a fine, this does not mean that the matter is over or that you are relieved of the debts to the bank. It is important to understand that if the debt is still pending, the bank has the right to file a civil lawsuit demanding the full debt with interest.
To differentiate between the criminal case and the civil, the former is independent of the civil and aims to deter those who are delaying payments or taking bank loans and in bad faith not making payments towards their debts. This aims to protect the financial system and its transactions. As for the civil case which follows the criminal case, the bank files a civil lawsuit to demand its full rights with interest without having to refer to the criminal case.
This ensures trust in the financial system and the strengthening of bank’s risk appetite to lend.
