statute barred debt query

AliceBanned

Hi, wondered whether anyone can help. I've done a separate post but this is more specific problem. If a debt is statute barred, can it not be collected in any way? I had a debt with Abbey 7 years ago, as well as lots of others at the time, most of which I repaid but just couldn't manage or get an arrangement with Abbey at the time. If I didn't pay it and it went on to debt collectors, could Abbey ie now Santander collect it from my current account if I pay my salary in? I am in the process of switching to Santander but realised this may be outstanding on their records - although they had passed it on to a debt collector. Not sure whether to proceed with switch now but apparently I can't cancel it. I just have to switch and then switch again to another bank..:(

fatbelly

Hi Alice

Sorry no-one's answered this - I'll give it a quick go.

Under England/Wales law a creditor has six years to commence court action from when the debt was last acknowledged, and it then becomes statute barred, which means court action is defendable on those grounds.

But you are right to infer that, under England/Wales law, the debt still exists and can be collected.

However, under OFT Debt Collection guidance (that's a long document now) they say that an unfair practice is:

continuing to press a debtor for payment after he has stated that he will not be paying a debt because it is statute barred

The debt isn't 'extinguished' like it is under Scottish law so I would say that depositing funds with a creditor who holds a statute barred debt is skating on thin ice as the original right of set off may still apply.

AliceBanned

Thanks Fatbelly. I'm going to have to close the new account, even though Santander claims that I can't close it!

AliceBanned

Fatbelly - just had a thought - I don't think Abbey held the statute barred - it had gone on to a collection agency. Surely in this case they have no right to chase it?

Thanks, I'm really worried!:(