SCOTLAND'S GROWING debt crisis is set to take a turn for the worse, as tens of thousands of debtors face being chased for long-standing money owed from years ago - by collection agencies who may have paid just pennies to buy their liabilities.

UK banks and credit card agencies last year offloaded a record £6.5 billion in unpaid debts to money collection agencies, up from about £4bn in 2004. Estimates suggest the total debt being chased could reach more than £8bn within the next three years.

Some experts warn that, unlike some banks and card issuers who are seen as a softer touch when it comes to collecting money owed, the new "owners" of the debt are more likely to hunt people down, regardless of how vulnerable they are.

Joanna Elson, chief executive at the Money Advice Trust, which runs Scotland's National Debtline advice service, said: "The further away debt gets from its original lender, the less interest they may have in ensuring good practice. There may be some collection agencies who cut corners."

One recent case seen by the Sunday Herald was that of an 85-year-old, now living in sheltered accommodation, facing a demand for almost £2000 for money she owed on a Barclaycard back in August 1999. The original debt had been barely a quarter of that amount, but grew after interest of almost 1.5% a month was added to what she owed.

A Barclaycard spokesman declined to discuss the case, but said: "Those who have failed to repay their debts should always assume that their debts have not gone away. Where we do pass on a debt to a collections agency, this action will only be undertaken after all other options have been exhausted.

"Customers who are in this position will be informed that their debt is being passed onto an agency for collection."

The surge in the amounts being sold on comes as the big banks wrote off £6.7bn in bad debts in 2006, according to the British Bankers Association, the industry trade body. Total figures for card companies are not known, but Barclaycard alone was forced to write off a staggering £1.57bn in bad debts last year.

However, contrary to what many believe, "writing off" debt does not mean those who owe the money are no longer chased for it. However, consumer groups argue that debt collection agencies are bound by the Limitations Act of 1980, which says a creditor has only six years to take legal action over a debt. After that, the slate should be wiped clean.

But Kurt Obermaier, executive director at the Credit Services Association, which represents debt collection agencies, says: "If you owe me £20, the fact that I can't sue you after six years doesn't mean you no longer owe it to me. It does not finish the debt and I can go to you seven, eight or however many years later and politely ask you to pay me back that money. If you refuse, I can politely warn you that I will be coming back to see you next week to ask you to reconsider."