dealing with finance co whilst GAP ins sorted

tiredwithtwins

hi,
I wondered if anyone could offer us any advice please, regarding dealing with a finance company whilst a gap insurance claim is sorted out?
to cut a long story short, the car we bought on finance in june 2000 was written off in an accident in dec 2000, and we submitted the claim for total loss to the gap ins co whom we took out gap insurance with. we heard nothing from anyone for about 18 months until the finance co wrote to us asking for settlement of the outstanding finance. we rang and explained we had claimed, and they suggested we got back in touch with the gap ins co, which we did. they had lost the claim, so we submitted another. heard nothing for another 12 months, then got another letter from finance co. rang them, explained situation and we got back in touch with the gap ins co. they didnt know why it hadnt been settled and promised to sort it out for us. another 12 months or so went past and another letter arrived from finance co, stating it was still unpaid. the finance co said the gap ins co had changed so we rang them, who sent us another form and we submitted the claim and supporting documents again.
then in early 2006 finance co wrote to us to say it was still outstanding. the person at the finance co suggested i send her the documents and she would forward these to the relevant dept at the ins co to get it sorted, which we did.
didnt hear anything until october 06, yet another letter from finance co saying still not paid. again, they suggested we send them the documents which we did. heard nothing until yesterday ... yes, youve guessed it, letter from finance co saying still upaid. when we rang them, they were very abusive and threatening, threatened us with court, attachment of earnings orders etc. as i argued our position the person was getting more and more unhelpful; when i asked for the details of the gap ins co she had forwarded our documents to so i could chase up the claim she said she didnt have them!! they finally produced a name and contact details, but when we rang this company they had no record of our claim or documents the finance company reckon they sent them.
Now ive been in touch with the financial services ombudsman who are investigating the insurance company ... but cant find any help on what to say/do for the finance company. quite rightly they want the debt settled, but we have complied with everything they have asked us to do - they know we have a legitimate claim and they are obvously aware of the incompetence of the insurance co at not paying out - but are still threatening us with legal action if we dont offer some repayment plan by monday 29th. the financial services ombudsman said they cant do anything about the finance co cos our problem isnt with them.
ive been in touch with the office of fair trading, who siad write to them and state that the financial services ombudsman in investigating the insurance co and that they should withhold any legal action until this has been investigated.
thing is im worried that they wont, and we will end up being taken to court for non payment and end up with a legal bill.
can anyone advise me on our legal position, or offer any suggestions as to how to word the letter i will send to the finance co?

thanks for reading .... sorry its so long winded, but thanks in advance for any advise/suggestions.

sue