Worried about son's house

[lady_p_gold]

My son had a good job and bought a house, he also took out critical health insurance through Lloyds. Sadly he then became very ill and was diagnosed with a condition which meant he found it hard to work. Lloyds refused to pay up as they said he needed to be 'under the constant care of a specialist' .. but he didn't need to be as the condition was already diagnosed and he didn't really need to see them again. Anyway, this has meant he got into debt and although he has struggled along with some help from family, he is now married and has a baby on the way and so I am so worried that Lloyds, his main creditor could make them homeless or something. They are up to date with mortgage payments but just have this debt with Lloyds looming over them, could they make them sell the house ? He would never get another mortgage now as he still has ongoing health problems. Any advice gratefully received.

[Slingshot]

It sounds like your son had Critical Illness Insurance which normally only pays out on a Terminal Illness, cancer etc. There are other Insurances that pay out if you are made redundant or fall into a long term illness. You need to take advice from an Independent Financial Adviser and get him/her to read the policy document as Insurance Companies frequently try to wriggle out of making payments. Maybe he just wasn't covered. Try www.unbiased.co.uk for an IFA in your area.

[themas]

You seem to have 2 queries. As far as the insurance is concerned did your son go through the complaints procedure and then to the Ombudsman? If not, he should do so if it is not too late.

I do not understand your reference to a debt to Lloyds as this is presumably not related to the insurance or the mortgage. What is this debt for and how much is it? Are any payments being made on it at all? With this info it might be possible to answer your query.

[lady_p_gold]

It is about 30K and it was a loan, I think he has offered to pay some each week but they said no. I will ask him to think of the Ombudsman, thanks for that.

[themas]

The loan is presumably not secured on the house, in which case the creditor cannot "make them sell the house" without first getting a CCJ. If this is got and your son defaults on the payments under it then Lloyds can go back to Court to get a charging order securing the debt on the house. Once they have that they can go back to Court again and ask for an order for sale, but it is by no means certain that the judge would grant this.

If Lloyds have rejected your son's payment offer he should try to get help from a free money advice service, such as CAB or CCCS (be careful - there is a rogue outfit also calling itself by these initials which is a fee charger). He needs to make sure Lloyds gets his income & expenditure statement in writing, with his payment offer and an explanation of why his circumstances have changed so that he can not afford the original payments. Also, freezing of interest & charges should be requested. He should make the offered payments (keeping evidence) whether Lloyds accept the offer or not.

If Lloyds issue a County Court claim the financial statement on the form must be completed in the time limit given, and the payment offer repeated. Hopefully, the Court will then issue a CCJ for the amount he has offered. If they issue one for a higher amount he can ask in writing for a redetermination with a hearing - which will be at his local Court. Provided he always pays the amount of the CCJ payments on time then Lloyds cannot go back to Court for a charging order.

[lady_p_gold]

Thank you for the really helpful replies, I shall convey them to him, kids eh, who'd have 'em! Thanks again.