On December 27th, the story of “Man Dies After Taking Out 150,000 Loan, Bank Demands Penalty Interest” trended online.
According to a report by the Modern Express, Xu Da (pseudonym), a resident of Huai’an City in Jiangsu Province, had previously taken out a 150,000 yuan loan through mobile banking. Less than a month later, Xu Da passed away unexpectedly. His wife, Yu, inherited the house, while their son Xu chose to renounce inheriting the assets.
Four years later, the bank sued to demand repayment of the loan, interest, and penalty interest from Xu Da’s wife and son.
On December 25th of this year, the Huai’an Intermediate Court disclosed this case.
The court stated that due to Xu Da’s passing, the financial loan contract that he had with the bank during his lifetime was transferred into a debt relationship between Yu and the bank. Yu should bear the repayment obligation within the scope of inheriting Xu Da’s estate and pay interest within the loan term as stipulated in the contract, as well as pay interest beyond the loan term based on the LPR interest rate standard. The bank’s assertion of penalty interest is essentially a form of default liability. Since Xu Da’s death was accidental and not intentional default, and the bank did not actively pursue collection when the loan principal and interest were not repaid monthly, letting the situation persist for nearly four years, causing losses to escalate, the claim for penalty interest by the bank was not supported.
This topic has sparked widespread attention among netizens. Many believe that the bank should not have insisted on penalty interest in the first place.
Some netizens also raised doubts about the bank’s lack of monthly collection efforts for four years.
“DreamingBackTo20158”: Some banks deliberately do not pursue collection, waiting until the interest and default fees accumulate enough before directly suing the borrower.
“Mingxin Woodwork”: Four years without collection, shouldn’t it have exceeded the statute of limitations for lawsuits?
“CuriousCatKingd4”: From another perspective, banks in this situation may not have intended to recover the money at all, as evidenced by the lack of collection efforts over four years. However, the account cannot be left unresolved indefinitely, and no one dares to unequivocally write off this debt. Therefore, filing a lawsuit is the best approach. If the court rules against imposing penalty interest, it would be a manageable outcome for the bank.