PPI on Statute Barred debt?

bery_451

Hi,

I remember having ppi on a debt that is now statute barred status.

If I claim ppi will the statute barred status go away?

For the borrower to be eligible for ppi does the borrower has to fully pay the debt 1st?

Carrot007

If it is just statue bared and not cancelled (scotland). Then the company can take any ppi refund and offset it to the debt first.

dunstonh

If I claim ppi will the statute barred status go away?

No. but you dont get the money. Statute barring just means that they will not pursue you through the court. The debt still exists and the regulator allows redress payments from PPI to get against debts in arrears, defaults and amounts previously written off through agreement or statute barring.

bery_451

Ok so no point claiming PPI then?

PPI claimants are only eligible for PPI refund if the debt is cleared 1st?

[Deleted User]

bery_451 wrote: »

PPI claimants are only eligible for PPI refund if the debt is cleared 1st?

You can still have a PPI refund, but it will be used to clear your debt. You would only personally receive a refund of any excess amount.

This assumes that any such complaint is successful, of course.

PSW

If the debt was "sold" and you made a successful ppi complaint, any refund would be paid to you and not the company that purchased your debt.

dunstonh

PSW wrote: »

If the debt was "sold" and you made a successful ppi complaint, any refund would be paid to you and not the company that purchased your debt.

Not if there is a clawback option with the debt. Most lenders have been including that for some time and where it exists you wont get the money. Clawback option is a something that very old ones are unlikely to have.

PSW

dunstonh wrote: »

Not if there is a clawback option with the debt. Most lenders have been including that for some time and where it exists you wont get the money. Clawback option is a something that very old ones are unlikely to have.

When did lenders start doing this? It's not something I've heard of before but can easily imagine it's something that lenders would introduce.

dunstonh

When did lenders start doing this?

Some always have but those that havent started around a decade or so back. Importantly, it appears to be retrospective as it is the contract between the bank and the debt management company that matters. So, let's say a lender never had that agreement, PPI complaints in that period would not be able to use against the defaulted and sold debt. However, the lender then changes the agreement with the debt management company, then going forward from that point, PPI complaints can use that money against the sold debt.

I think, from memory, HSBC is one of the main ones you see this change and it came about following a fairly high profile case in the financial press about them losing a complaint at the FOS as the debt was sold with no ability to bring back to the lender. Now you see all HSBC ones about sold debts going against the consumer on that point.

bery_451

I remember borrowing over a decade ago in 2006. How do I know there was a clawback option with the credit i borrowed?

PSW

Who was it with?