Can a bank setoff a PPI award against an extinguished debt

Maxis

I live in Scotland and when I was a lot younger I took out a loan from Bank of Scotland. I had lots of issues with this loan through illness and job losses but I paid the entire loan off over a period of almost 10 years. round the same period I took out a credit card, also throuigh BOS but I was unable to keep up payments.


I defaulted on the card this was over 10 years ago. I recently came across an advert for PPI reclaim, I followed up and was awarded just over £3000 PPI on my loan.


I read that in Scotland a debt becomes extinguished as opposed to simply being status barred. In effect a debt can vanish if there is no payment or acnowledgement over a period of time. I have not had any dealings at all with BOS in well over 10 years. Can they still take the PPI refund to make a payment to the credit card account or under Scotts law is this not possibe because the debt no longer exists?


It was never my intention to fail to pay the card account. My financial situation at the time was simply not sustainable.



Thanks in advance for your replies.

Nasqueron

If the bank is allowed to offset a refund against an unpaid debt then they will do. You can't really expect to not pay a debt back and then demand a refund of this money on top of that?

[Deleted User]

If you've already been awarded and been paid £3K with no mention of off set then I can't see why you are asking since you already have the money.

However, if they've said the award is pending and needs to be checked by their insolvency team then off set is the most likely result. Debts are not "extinguished", your creditors are simply no longer able to chase you through the courts..

Sorry.

Maxis

I received a letter telling me I would be receiving a payment within 30 days. Just not sure about the status of the extinguished debt. I guess things could change between now and then.

[Deleted User]

Maxis wrote: »

I received a letter telling me I would be receiving a payment within 30 days.

Then the award is still to be checked by their insolvency team.

If the Bank still have records of your failure to pay your outstanding debt, it will be off set against your redress.

Only any excess will be paid to you..

sussexbhoy

Moneyineptitude wrote: »

Then the award is still to be checked by their insolvency team.

If the Bank still have records of your failure to pay your outstanding debt, it will be off set against your redress.

Only any excess will be paid to you..

Wrong. Scotland is different from England. This is a credit card debt so classed in Scotland as an unsecured simple contract debt. If a court order hasn't been obtained, you've made no payments toward the debt in the last 5 years and you've not written to the creditor admitting you owe the debt in the last 5 years then the debt no longer exists and there is no debt for the creditor to pursue, therefore there is nothing to offset.

[Deleted User]

sussexbhoy wrote: »

there is nothing to offset.

I remain unconvinced.

molerat

https://www.nationaldebtline.org/S/factsheets/Pages/statute-barred-debt-scotland/time-limits-for-recovering-debts.aspx

This means that it no longer exists and there is no debt for the creditor to pursue.

sussexbhoy

Moneyineptitude wrote: »

I remain unconvinced.

https://www.nationaldebtline.org/S/factsheets/Pages/statute-barred-debt-scotland/time-limits-for-recovering-debts.aspx
This should convince you

sussexbhoy

molerat wrote: »

https://www.nationaldebtline.org/S/factsheets/Pages/statute-barred-debt-scotland/time-limits-for-recovering-debts.aspx

you beat me to it

Bermonia

It is not about pursuing... it’s same as England except for timescale, process is the same and lender has right offset against its loses... they are merely blocked from taking action to recover debt.