THESE days, securing a loan is easy.

Repayment is the tough bit. And when you don't repay on time, the recovery agent may come knocking at your door. You might have read newspaper reports on how they 'tackle' those who default.

But what if you have a 'genuine' reason for defaulting on your loan? "Try for a settlement with the bank," says Ashok Kargutkar, a counsellor at Abhay, a debt-counseling centre. The operative word is 'genuine' and if you can prove the genuineness of your case, the banks may settle.

How it works:

1. Submit documents to prove you are bankrupt and cannot pay the outstanding amount. The most relevant document would be an affidavit that states you have no assets -- property or estate -- that you could use to pay it back. Consult your lawyer before declaring bankruptcy to the court.

2. If you do file for bankruptcy, the bank will not waive off the entire amount. You still have to pay an amount that is mutually agreed on, between you and the bank. "This amount largely depends on your ability to pay as well as the bank's policy towards such cases," says a senior bank official.

3. The bank may extend your repayment period and break the outstanding amount into equal monthly installments to facilitate repayment.

4. If you have credit card debt where the interest rates are 45 per cent per annum, you could go for a cheaper loan -- a personal loan.

5. If your bank agrees to a settlement, you could further request for an extension of the duration of repayment.

Calculate: In how many years can you pay off your debt

Photograph: Justin Sullivan/Getty

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e-mail: Kapildeo Singh

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