Mis-sold Loan Agreement

kl1ng0n5

I am unsure whether my father in law will be able to claim. He took out a loan with bank and was told at the time of taking the loan that he must take out PPI or he would not get the loan. He was also advised that if he where to lost his job that the insurance would cover the amount that was left on the loan.

A few years later he lost his job and the insurance started but it has only paid 2 years of the loan. The loan still has 4 years to pay and the banks want him to pay it. Obviously he has no money to pay it.

I have had a look at the loan agreement (unsecured) and how the bank wherever allowed to sell this in the first place is beyond me. It would have been cheaper to go to the local loan shark.

Can anybody advise me on his options that he has if any.

Thanks in advance.

homer_j_3

As far as the PPI policy is concerned, I would say that you need to cover the policy documents to see if the max payout was 2 years. Normally this type of cover is only intended for a short term.

Now, the loan may be voidable and/or unenforceable. Do you have a copy of the agreement?

Rafter

It would be very unusual for this kind of policy to pay the full loan off. Usually only death or critical illness results in the loan being paid in full, unemployment cover only lasts for one or two years.

If your father in law has no surplus income to pay an unsecured loan, then he should contact citizens advice or cccs about his options. It maybe best for him to declare himself bankrupt if he has no reasonable prospect of being able to repay it and doesn't have significant assets.

R.

kl1ng0n5

Homer J,

I have spoke to my father in law and he has advised that the insurance has paid out for 5 years, which I found weird as like you I thought they only paid out for a max of 2 years. He has an unsigned copy of the loan agreement. I am getting all the paper work tonight and will read all the information over the weekend.

Can you explain as to what you mean by the loan may be voidable and/or unenforceable?

Rafter,

He has no surplus income but unfortunately he owns his home so making himself bankrupt is not an option.


Thanks for your quick replies.

homer_j_3

http://forums.moneysavingexpert.com/showthread.html?p=11127491#post11127491

I have put it all up here.

kl1ng0n5

Homer J,

Very interesting read. I am going to read all the info that my father in law has over the weekend. I do know for a fact though that there is no mention of what commission the bank took. I can see another fight going on with this bank. So far though it is 1-0 to my father in law after we won back his bank charges.

homer_j_3

not a problem. If you need any further help, please let me know.