Bank Loan gone wrong

caeler

My mother in law has asked me to type up a letter for her to send to the bank on behalf of her mother who has now been diagnosed with dementia. Her husband died in 2004 and within months she has displaying symptoms now confirmed has dementia. I've found out that she got her self into serious debt and now social services have put her in a care home and will take all of her income to cover nursing fees.

Basically my mother in law believes that bank misold the loan to her, an 82 year old who could hardly walk at the time of going into the bank for the loan who had in the past 15 months managed to spend £27K. She was given a loan of £10K (without the family knowing) and now as from November won't be able to make repayments. We think two people befriended her and she spent the money on them.

MIL has gone to Citizens advice and help the aged and they believe the bank should write off this loan now? I've never heard of this, I thought she would need to go bankcrupt as she doesn't have any other type of savings (as the cashed in isas were part of the £27K.

I would love to hear your opinions on what can be done in this situation. This is not intentionally about not paying for the loan but its become impossible as social services don't consider any other outcomes including loan payments. Instead of writing a plee to cancel the loan maybe we should just advice them of the situation and let them try take the money each time and let them continue writing. Unfortunately gran is very sick and we're not sure how long she'll be with us.

I want to make clear she has absolutely nothing, otherwise that would be making good the loan before social services take her income but there isn't anything.

All comments welcome.

(Promise not to take it personally, I'm a little bit removed from the situation, I didn't get to know her that well until I married into the family, I'm just worried for MIL as its a total stress for her and the other siblings don't care (just worried that there is no inheritance anymore).

jonesMUFCforever

Do you know what the loan was for?
Was there any debts from when her husband was alive?

Does she own property?
If so they might stop repayments until she has died and the house sold.(They would put a charge on the property)

If not then the bank will have to write it off ......eventually.
After 3 missed repayments she will be in default and the bank's Collections service will contact her for a repayment plan.

In this case I would write a letter to the bank now explaining the situation (and if possible her doctor to confirm the medical diagnosis) to see if they will stop sending letters out etc etc.

caeler

She said it was to pay off her £4K overdraft she had run off and the other £6K for was a holiday. There was never any debt when her husband was alive, infact the account was always in thousands of balance. She has no property.

Social services have given a letter to show they will take all her earnings from now on and she has to be in a care home due to her condition.

jonesMUFCforever

Did she go on a holiday - if so did she go alone or did she take family/friends with her?

Can you see where I'm going here?
She does not sound like a spender but sounds like somebody who helps others??
Could it be that she has given the money away and perhaps it is time now for family to run round and help out??

Legally you don't have to - morally - depends on what the money was spent on.

caeler

she didn't go on holiday and we suspect she spent it on 2 people but can't prove a thing. We'll advise the bank to warn them of the situation but I'll prewarn mother in law she may not get anywhere.