my bank recently debited a significant amount of money out of
my checking account for an outstanding overdraft balance that I had in 2004 from a bank that my current bank now owns. i was honestly unaware that the debt existed. had i known i would have made arrangements to pay. For the last 6 months i have been going throught my credit report to clear all my debts and this was not on any of them. if i am not aware of the debt, how can i pay?? do i not have any rights at all concerning this??

Checking overdrafts are not reported to the credit reporting agencies. There is another information gathering system for overdrafts.

What rights do you think were violated? Have you discussed this situation with your bank? They might be willing to waive old fees or make some other arrangement.

I have two answers. The first is, yes they can do and unless you have some state requirement stating otherwise. They owed you what was on deposit, you owed them for the overdraft and your deposit agreement with them says setoff is permissible.

The only catch is dependent on your state debt collection laws. At some point there is a statute of limitations on when a non-active debt may no longer be collected. You'll have to find out what that is with research. If the time had not passed, as was noted you can ask for some of that back by making arrangements for payment. The bank is under no obligation to do this, however.