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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 71050
Experience:  Over 5 years in practice
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My mother has a loan with a bank. Due to ill health she fell

Customer Question

My mother has a loan with a bank. Due to ill health she fell behind in her payments. Now the bank have passed on her details to a solicitor. And even though she has offered to clear her arrears and start making re payments on time the solicitors want access to all her bank statements. She does not want to give out this information. 2 years ago her house was damaged. The insurance money that has come through is for repairs to the house. She is worried if the banks solictitors see money coming into her account they will ask her to use her insurance money to clear her debt- and she cannot do that- because the house needs to be re built. What can she do, can the bank ask her to use her insurance money which is only for house repairs to be used to pay her debt to them? Thanks
Submitted: 5 years ago.
Category: Law
Expert:  Jo C. replied 5 years ago.

How much does she owe?
Customer: replied 5 years ago.

she says £19,000

Expert:  Jo C. replied 5 years ago.
Ok. That is not an amount they are likely to write off then in practice.

I'm afraid that she is in difficulty.

She can refuse to provide this information. They have only asked for sight of it because she is offering payment in instalments and they are entitled to satisfy themselves that it is all she can afford.

If they do see this sum of money then they will demand that she settles. Insurance payouts are not ringfenced.

However, if she refuses they may sue her. She would not have any defence to the substantive action and she would be liable for their costs which could be a nasty shock given the amount in question.

She can ask the court to let her pay in installments and it would be agreed but the fact that she has a large payout is something the court would consider as well.

If this is a total of £19,000 then by the time costs were added it could amount to about £22000-£25000. For that sum of money the Court would really be a looking for a minimum payment of £200 a month or thereabouts.

I'm sorry this isn't the answer you wanted but it is the position that you face and I have a duty to inform you truthfully.

Hope this helps. Please remember to rate my service either OK SERVICE or above and then I will give you related information for free.
Customer: replied 5 years ago.


Could she offer to settle what she is in arrears of at the moment which is not the whole loan amount (£19000) but she says around £10,000 and then suggest she pay £200 pm. She has been asking to do that but they are insisting on seeing her bank statements. Her statements do not show a large payout- they show money coming in in small amounts and then going straight out to pay something

Expert:  Jo C. replied 5 years ago.
She could offer a lesser sum in full and final settlement. Sometimes they will agree huge discounts.

They may ask for sight of her statements though.

They will only generally agree a large discount if they think they will get no more at court in a cost effective way.