Hi Guys...I need your help
A friend of mine I think has been mis-sold a loan from a major high street bank in 2001
Briefly, my friend's former husband had a loan in his sole name of £15,000 over 5 years to purchase a car and was paying some £440 per month
He went to the bank where they had a joint account for advice with view to reducing the monthly loan repayments. Bank manager told him during the visit that if a new loan was taken out in his wife's name the bank could reduce the payments to approx £380 per month over 5 years with an APR rate of 10.4 percent (she had been with the particular bank for 15 years and apparently had a good credit rating and the interest rate had then become more favourable)
Husband came back with paperwork from bank and got wife to sign up to a sole loan agreement of £15,000 with a monthly loan repayment of £317 plus payment protection insurance loan of £68 per month taking the total loan to £18,100 (she's not great with financial matters and thought her husband had actually set up a joint loan as her income was so small)
At the time her income was less than £500 per month as she was only able to work part-time having 4 young children. They both lived in council accommodation so she had no security for the loan
At no time did she see the bank manager who issued the loan or take any advice from him..it was all done by her husband and the bank manager. She signed the paperwork at home and hubby took it back to the bank and the money was transferred into their joint account.
8 months later hubby left her and the kids and after 3 months on such a small income she was unable to afford the loan repayments. They also had an joint overdraft which she also could not afford to pay. The Bank then put the matter in the hands of debt collection agency and after some considerable time they froze the interest on the loan but she has been paying reduced payments off the loan and also the joint overdraft for some 10 years now (former hubby does not pay or even get chased for the joint overdraft !)
The banks collection agency hound her about every 3 months on the phone asking her if she increase her payments or even borrow money off friends or relatives to pay more off the loan...it really stinks to me
Could a loan be set up off-premises in circumstances like this with no details explained to her by the bank manager..not even a phone call ?
How can a lender realistically think that a person with 4 young kids and an income of less than £500 per month can service a loan with monthly repayments of £380 ? (her hubby at the time earned approx £1400 per month)
I know some people will think (as i did) why the hell did you not read the loan agreement ? but genuinely she never though for one minute that anything was untoward as her former husband set it up..she just thought it was a joint loan agreement with her husband which made sense as it reduced their monthly outgoings.
The only reason it has come to light now is that she moaned to me one day that she would be in debt until her late 70's (she's in her late thirties now) and then explained her circumstances above and showed me the loan agreement.
Does she need a solicitor ? (bearing in mind money is tight)..it's giving her sleepless nights
Would appreciate any advice / thank you