I applied for an &More Credit Card in 2003. Under Payment Protection are the words "We strongly recommend you take cover by ticking the box and signing below". Can this be interpreted as coercement and subject to a mis-sold PPI Claim?

Hi. My wife and I have a Secured Loan with Paragon Finance, that was taken out in January 2006. We fell in to arrears in April 2011 and this has now escalated. We have been unable to make the monthly payment nor been able to repay the arrears. We received a Calling-Up Notice on 20 September 2011. I spoke to Paragon on 29th September 2011 with a view to trying to sort out the arrears and prevent further action. Unfortunately, we were unable to make a satisfactory arrangement, and this has now resulted in a citation for repossession under the Conveyancing and Feudal Reform (Scotland) Act 1970. It states that we are ordained to answer within the the Sheriff Court on 25th January 2012 @10:00am. I am at my wits end, as I have been unable to work since 2006 due to 3 failed back surgeries, and although I was still in receipt of salary for1 year, I now only receive Incapacity Benefit. My employers dismissed me due to ill-health in July 2009. My wife works, but her income covers our mortgage and living costs. When we took out the loan, which was via Loanline (Brokers), they advised that we needed to take the PPI, in order to get the loan. I did submit a claim, but Paragon declined it on grounds of my back problems being pre-existing, and also within 24 months of taking out loan. (I'd only seen my GP once about a sore back, and everything sorted itself). So now, we are being faced with the prospect of losing our home. Can it be repossessed if they are only the second in line, after our mortgage providers? Also, If I was able to raise the money to clear the loan entirely, will this stop the action or not? I have looked through the paperwork received today, and there is no mention of stopping the court action, if loan repaid. If I was to submit a claim for PPI refund, would that have any affect on the court action? I am really at a lose to know what to do. Any help/advice would be gratefully received. I know that this is all of our own making, but things have just got out of control. We have struggled to make sure our mortgage payments have been paid, only for this to happen. Paragon, have really made our lives hell, and now are about to make it worse! Thanks.