I took out a Unsecured Personal Loan with Halifax online in December 2011. I was NEVER asked questions like, can you afford the payments, are you employed/unemployed, and I certainly was not asked about my income. This have got so bad I am currently on an IVA - Halifax increased the IVA from 5 years to 6 years forcing me to pay for longer. I am now wondering if bankruptcy is the best option. Do I have a claim that Halifax lent to me irresponsibly without going through my finances first?

Before I go into any great detail with this, could I ask one of you learned Caggers this question? Would you deem it irresponsible of a bank to lend a person on sickness benefits a 15k loan, over the phone, without a proper assessment of affordability being carried out?

Advice, please? I feel that LloydsTSB and Black Horse Personal Finance have colluded, and exacerbated a situation entered into with SPML This is going to sound like the intro to an x-factor audition, get your violins ready... 2 years of Prozac-fog ended last November, and I am now lucid, and really quite angry. Feel free to slap me down if I’m just whinging. The Prozac episode followed a very messy repossession and subsequent breakdown. To be honest, if I hadn’t been so blinkered about pre-existing medical conditions and PPI, the Prozac would have happened much sooner. In 2002, Abbey National reached the end of their tether with our sporadic mortgage payments (Husband came out of work, I was working part time...) they went for repossession over arrears of £800. Fair play to them. In stepped the saviours that are Capstone/SPML, and confirmed a remortgage to cover the loan, arrears, court costs etc. Seemed a great idea at the time, hindsight’s a wonderful thing. The honeymoon period was great, the monthly payments were only slightly higher than the Abbey ones (the ones we couldn’t maintain). Honeymoon over, and the introductory rate bounced up, the payments rose from something in the region of £200 to over £400 per month (I don’t have the exact figures, this was pre-prozac, there’s a good chance that the paperwork is stuffed down the side of a sofa somewhere.) LloydsTSB were ever so good, there was a little button on the internet banking screen that said ‘increase overdraft’, so a cycle began of us missing a monthly payment or two, getting a nasty letter from SPML, and increasing the overdraft, paying off the arrears, and starting all over again. I got a bit fed up of forever being in overdraft, and asked Lloyds for a loan to straighten everything up. Now, we didn’t fit the lending criteria for Lloyds....but, Black Horse ‘our sister company’ were happy to accept us. I think this is when it really started to go pear shaped. The first loan with Black Horse was ‘only’ about £3000, and things ran smoothly for a while, we were on the edge of our income, so every time we had a vet bill, a domestic appliance die on us, or any other unexpected expense, we were back in the overdraft. We were both working, so Black Horse had no issues with increasing the loan when we got sick of the overdraft fees. We ended up with an overdraft of £7500 before Lloyds asked what was going on. I was very clear with them that we were struggling to keep up with our outgoings, and they converted the overdraft to a special agreement of a separate loan, £75 a month, which we managed to pay every month because the due date was the same day as my wages. Over this period we had also been increasing the Black Horse loan, as SPML really liked sending out court claims for possession. I was also very clear with Black Horse as to the purpose for the extensions on the loan, I recall them actually speaking to SPML and coming to an agreement that SPML would agree to the loan being secured against the property, as long as their arrears were cleared first, before any other debt was repaid. There was another instance where a family member paid off the arrears on the mortgage pending a further advance from Black Horse being transferred, there was full three way discussion between SPML, Black Horse and the family member at this point. The house was repossessed in November 2008. I was ‘out of it’ to such an extent that I had just assumed that I would be able to ‘sort it out’ again, as had happened over the past 5 years or so. Looking back, it might have been less stressful for everyone involved if Lloyds/Black Horse/SPML had not colluded and allowed us to build up the debts to such unmanageable levels. It seems in bad taste to say so, but if the repossession had taken place earlier, rather than Lloyds allowing further increases on the overdraft, Black Horse allowing further advances on the secured loan when the credit files showed that this was an on-going pattern, and SPML accepting several 11th hour payments, many people would be much healthier and happier today. My question is, do I have a case for irresponsible lending? Irresponsible borrowing, certainly, I hold my hands up to that. We knew every time that we extended our borrowing that it was not a solution, only a stop-gap, but felt that mainstream lenders would reject us on the basis of our credit history. The current situation: Black Horse debt £29000- in default for 18mths, with no legal action to date. SPML (sold the house under-value) £3000 owed due to mortgage shortfall, instalments agreed with Scotcall, but defaulted October 2010. Lloyds closed the account January 2011, £5500 outstanding on the loan, £866 on the overdraft (£3600 at the time of the repossession) First solicitor’s letter received last week, demand for £266 overdraft overlimit.