In 1998 I gave Lloyds Bank a second charge on my home limited to £10K. I became ill in 1997 after the death of my business partner. We were both in receipt of insurence from the bank.The insurnece paid out ok on my partner, and for some reason the policies were closed. Lloyds bank re ordered Insurence for me but later in 1997 I became ill and had to finish work due to health. The insurence would not pay up for me due they say to premedical conditions. Since 1998 I have been fighting the bank as they were always aware of my medical conditions however I hears from the high court that I could not appeal.The bank are now seeking me to surrender my home to them within the next seven days. I am in bad health and disabled. Is there anything at all I can do?

-- Patrick C Scully (psdl22168@blueyonder.co.uk), April 28, 2004

Answers

The bank will have to obtain a possession order just like any mortgagee would. The only way forward is to put forward a plan to pay off the loan and accept a suspended possession order - i.e. a possession order that will hang over you, if you fail to pay, the order kicks in and you could be evicted.

The demand to hand over possession is like a formal demand from them - it will take about 2 to 3 months to issue the proceedings and obtain the court hearing. When you answer the summons and go to court, do not cloud the line between the possession matter and the insurance matter. On the latter, you have fought and lost. You are now fighting to keep your home and pay your debt to the lender by instalments. You must attend the possession hearing - some judges automatically make unsuspended orders if the debtor fails to attend and then you have a hell of a job overturning it. Make up a spreadsheet with your income and outgoings on it and show how much you can afford to pay each month towards this debt.

Make sure you are claiming everything you can - see a welfare rights officer at the local council or the CAB. If you have overpaid tax whilst working, claim it back. Cash in any insurance policies etc.

Whilst I canot obviously predict the outcome of your own particular possession hearing, if you do it right and show you can pay something off the debt each month, the judge is more likely to make a suspended possession order and suspended judgment - neither of which appears on your credit history so long as you keep to their terms.

Good luck

-- David J. Button (davidjohnbutton@supanet.com), April 28, 2004.

Patrick,

Have you tried going to the Financial Ombudsman Service ??

Mark.

-- M Amos (idgroms@hotmail.com), May 04, 2004.