My experience working with financially-challenged consumers and their creditors nationwide since the economic downturn reflects that virtually every national issuer of credit cards, even larger regional credit unions, have gone as far as they can to assist their struggling account holders. Capital One is an exception to this. How Capital One goes about settling a debt with you, their treatment of credit reporting after agreeing to reduce your balance, and the fact that they are the most likely to sue for collection, all combine for one huge exercise in caution and awareness.
Credit card issuers offer plans to reduce interest rates on credit cards through hardship plans, debt management plans, credit counseling plans, or offer balance concessions through debt settlement, which go a long way in helping their customers avoid bankruptcy. In this way (credit card payment concessions), Capital One is not all that different from other credit card banks.
Capital One, in my Experience, is Tough to Work with
Banks who are paying attention know that working out some type of arrangement with account holders, who will otherwise be forced into filing chapter 7 or 13 bankruptcy, is in their best interest. Creditors will generally offer fair concessions as a final option because they will lose the least. For more about this see: Banks Choose to lose the least.
I am not sure Capital One is paying attention.
Capital One is quick to use the courts in order to collect on delinquent accounts. They would apparently rather their account holders file bankruptcy.
I continue to encourage seeking bankruptcy protection if your debt is mainly with Capital One.
Now we have Capital One choosing to be spiteful, and perhaps illegally, with those few credit card holders they may offer fair concessions to. To see the collection letter referred to below in its entirety: Capital One Collection Letter
The coupon for $50.00 you will see in the collection letter linked above is not all that new a twist to get a delinquent CapOne credit card member to call MRS Associates (a debt collector). It is worth noting however, it is only a collection ploy and nowhere near worth taking advantage of the perceived “FREE STUFF”. The main problem I want to draw your attention and provide awareness to, is number 9 on page 2 of the collection letter.
9. Credit Reporting of Your Settled Account. If your Account is settled before it is charged off, the remainder of your Account balance will be charged off. We will then report your Account to credit reporting agencies as settled with an outstanding balance.
Fair Credit Reporting Act (FCRA) and the requirement to report only complete and accurate information to the Credit Reporting Agencies (CRA’s)? This would FALSELY characterize the trade line and SKEW any later debt to income and/or utilization formula rendering them inaccurate as well. This means that Capital One could be causing consumer’s damages post debt settlement, when they are applying for future loan products whose interest rates and even approval will be factored on a credit report that contains erroneous and false information.
Reporting a balance still due and owing when it has been forgiven would falsely characterize this trade line in your credit report. How do we know the unpaid portion of the settlement is forgiven? Let’s look to number 8 on page 2 of Capital Ones collection letter:
8. IRS Reporting of Debt Forgiveness. If we cancel or forgive $600 or more of principal on a debt you owe, we must provide a 1099-C tax form to you and the IRS. Please consult your tax advisor and the instructions accompanying your tax forms for more information.
How can number 8, indicating the required reporting of forgiven debt to the IRS, comport with erroneously reporting an outstanding balance when it has:
- Been forgiven
- Been settled for a lesser amount agreed to by both parties, thereby leaving no “outstanding” balance
If you have a Capital One story to share, especially as it relates to improper credit reporting, I invite implore you to share it in the comment section below.
UPDATE: Since publishing the above Capital One article about credit reporting and settling Cap One credit cards a couple years ago, some softening of options available to account holders who fall behind has occurred. We do still see the poor credit reporting policy on settled accounts with Capital One, but have also seen how that is getting addressed using disputes with the credit bureaus.
If you are serious about resolving unpaid credit card debt with Capital One and have other credit card debts to resolve, it is important to prioritize accounts and target the best savings with the available money you have and can project saving up in the short term. If you have an experience with Capital One collections, credit reporting, or lawsuits, please share in the comments below. If you have questions about how to handle debts with Capital One, post in the comments for feedback.
I’m having a Capital One situation where due to Covid, I got a charge off. At the time all payment’s were 100% on time from account creation in 2018 till feb 2021 and high balance was around $3,100 of $3,500 limit at time of last payment feb 2021.
I checked my credit report and ALL past payment data, high balance data records have been removed from the reporting (it reads no data) and only a copy and pasted high balance amount of $4,1XXX and past due amount of the same $4,1XXX has been inserted into those two fields over and over since 2021. It’s now June 2024. Credit report also says 70 months of negative payments.
I attempted to refinance my mortgage and got a denial letter which prompted me to look at what was going on.
My question is….. I drafted a dispute, debt validation letter and listed missing data, inconsistency in last payment date between bureaus etc that I submitted to the credit bureaus then had it mail intercepted to come back to me out of fear this could trigger a lawsuits from Capital One.
What should I do? I believe the credit reporting is misleading, erroneous and I know the CFPB has already flagged Capital One for this type of behavior but I also think statute of limitations (if it’s four years and not five years) is coming up feb 2025, should I just ride it out till then and hope for the best? Or…..
Do you think I should continue with the Credit Bureau dispute to try and have it removed from the credit report, or do I have an actual Claim against Capital One that I should proceed with?
I just don’t want to do something that I’ll regret later.
Is your main goal to complete your refinance? If it is, you may want to look at settling the balance with Capital One for less. You can typically get your mortgage with paid collections, but not with unpaid ones of this size.
If you are not in a hurry to accomplish a goal, you could wait out the SOL to sue, but the credit reporting SOL is still going to be 7 years from when you stopped paying, which could put your refinance goal that far out.
Capital One can fix the credit reporting to reflect accurately, and your dispute could be the genesis for them to do so. Capital One removing the item from your credit is probably the least likely outcome, but it could happen.
I would talk with a skilled FCRA consumer law attorney in your state about any claims you may have.
Hi Michael,
As I mentioned in our phone consult yesterday, I called CapitalOne over 2 weeks ago and offered them a lump sum payment of ~22% to settle a balance of over $10,000 in full. (Last minimum payment made 12/9/2021, or about 180 days ago). They said they would mail or call back with an answer within 10 days. Thus far, I have received no response.
Today I called them to follow up. The customer service agent submitted a request with my low offer, and came back with an offer to settle for an amount ~90% of the balance owed (lol). I countered with an offer of 40.5%, and the agent repeated that the minimum amount they can settle for is the previously mentioned large amount ~90%.
At this point I see no further steps to take with them other than waiting several days or weeks.
You could wait before your next effort.
I sometimes see Capital One draw a hard line on settlement. I could mean getting help from a negotiator would be a good idea, as it could pay for itself in how much better a deal you get, even with the professional fee.
Let me know if you want help on this if future efforts do not improve for you on your own.
Hi Michael I am dealing with the same thing with discover. I settled and got the agreement in writing prior but they updated my report as still owing an outstanding balance of the amount not paid which was forgiven as a part of the settlement. Shouldn’t it says zero on my report?
It can take Discover and other banks two billing cycles to get the credit reporting to reflect a zero balance owed after your settlement.
Has it been more than 60 days since your payment for the settlement cleared?
Hey Michael, we spoke a few months ago, I had 5 accounts with Capital One that went into Charge Off status. ($58,000) Surprisingly at that point we came to an agreement on a settlement amount of about 30% with payments over 48 months. ($385) A few months into it I contacted them to see if they could lower the monthly payments. They VERY GENEROUSLY offered me new terms on each account to pay $25 a month, with terms from 111 to 175 months interest free to wipe out an $18,000 settlement balance and avoid being sued. Im sure that being a Disabled Senior had been a major factor in consummating this awesome agreement. Now moving on to 4 accounts with Synchrony Bank and 3 with FNBO. NON have contacted me since I signed up with HELPS Law firm run by Eric Olsen, a non-profit firm to help Seniors and Disabled people with debt issues.
Thanks again for all your help Michael! How do I transition from inquiring about my account to offering a settlement to C1?
the last call was 149 days past due, so Im calling today to try my first attempt at settling.
I know you talked me through this, but I hope it doesnt backfire. I didnt have success with FT so I am just leery.
I just called them again and they said I was 159 days past sue and charge off will be Dec 3rd.
I offered them $1,000 settlement and they declined and offered $4994. (Debt is $5,600 but now up to $5,800 presumably due to fees, etc) I told them I didnt see how I could come up with that and I thanked them for their time. What should I do next?
I would schedule a quick call with me this week to go over a couple things.
thanks Michael!
What’s the difference in approach between talking to an attorney and settling vs to the credit card company. I feel like when I tried to negotiate woth the company they stuck firm at 90% and now they gave it to a lawyer, but it hasn’t hit 180 days yet . How can I avoid pitfalls of negotiating with lawyers? I heard they were agressive?
Collection law firms are often the most aggressive. This often translates to paying the highest settlements.
Preventing attorney placement is typically the best path.
If attorneys do get involved in the collection, defending the suit will then become the path to better outcomes.
More on resolving debts when sued here: http://consumerrecoverynetwork.com/question/can-you-negotiate-and-settle-a-credit-card-debt-if-you-are-being-sued/
Hi Michael, Just speculating, If I were ever to have a judgement against me, and one or 2 years down the line were able to file bankrupcy, would it end the lawsuit?
Yes, if you file chapter 7 bankruptcy it would typically wipe out judgment debts too.
i calle C1 and they told me I was 149 days past due and they offered me a plan. I declined that but I said I would call them after I decided what to do. I should maybe wait till 155 days? They say they would charge it off at 180 days.
I would probably call again in a week or two.
I am seeing more settlements with Capital One get done after the account charges off.
does that mean after the 180 days? I seem to be having bad luck with that with First Tech as they sent it to a lawyer after 160 days and they seem to be holding firm at 90% so I am concerned C1 will do the same?
Capital One does send some accounts to attorneys, but typically not right after they charge it off at 180 days late.
Hi Michael, I currently have two Capital One Credit Card accounts that will be charged off soon around early January 2022. I owe about 8k and 11k. At this point they are only willing to settle for the principle amount in lump sum which I can’t afford. I have another account with them, but in good standing. What are the chances of them settling for 30% once it’s charged off?
Odds are not high that you settle for 30 percent with Capital One before or after charge off.
Hi Michael, Thanks for all you help! You are such a gift to consumers! I owe 5.6 K on a Capital One Spark card and have another card with Capital one. I would like to try and settle for 50%. My other capital one card in current and I am wondering if that will be held against me in the negotiations or how to handle it.
There are instances where your open and on time accounts can impact the results you may see when settling debts. When the accounts are with the same creditor, that is all the more likely. That said, Capital One is a bit of an oddity, but in a good way.
I see people able to keep accounts open and uninterrupted with Capital One, even when settling another account.
My talking point in this situation would likely be the fact that one is a business account that is closing down, as the personal card I have been able to just scrape by with payments.
thanks Michael!! You are a rare gem!
So I just got a text from my sister that apparently she was a joint user on the Kohl’s Capital One card that my mom is trying to settle on and hasn’t paid since early November. In the other thread you mentioned January would be 30 days late so they’re currently 60 days late. She’s worried about her credit being shot for something she was unaware of even happening. Do you advise paying Kohl’s their minimum, getting her off the account, and then starting the clock over? Or maybe just have her wait another month and settle at 3 months and hopefully put this behind her? Maybe you can shed some insight onto these options that we previously have not thought of. Thanks
Authorized users are at risk of negative credit reporting. You want to remove these before falling behind.
If it is worth it for your sister to come off the account, and for most of us it would be, paying the account to then take her off as an authorized user makes sense.
I may try to call Capital One and try to remove her first, but ultimately be okay with catching it up if I had to, were it me in this situation.
Yeah she had to catch it up to take my sister off. She has another Capital One Card 60+ days delinquent so I’m hoping she doesn’t have to start the clock over on the one she just paid
We hopefully should be able to settle this one that has restarted at the same time, right? They would be about 5 months and 3 months. I would think they would group them together at time of settlement/collection but I may be wrong. Otherwise I guess we could do them separate.
I would be prepared to do them separate.
Hi Michael. Doing some research on the cards that I owe for and I read this and all of the recent comments and it’s kind of scary. My accounts are current with Capital One. In 2021 with proper planning should I be able to get this to a 50% settlement? Or is there really no way to know with them? You can save the “how” for the phone call that I plan to schedule eventually. Just wondering if they would likely sue me and ruin any strategizing and I’d be stuck grasping for 70% like the other commenter. Thanks!
Capital One is settling very favorably and offering really good monthly payment terms. Doing the negotiations correctly should mean there is no risk of being sued!
Apparently, there was a balance on my Neiman Marcus Capital One cc and I was not aware of it. I never received the package though tracking number shows it was received. Time lasped. After 6 months, I got an email from experian about my credit score decreasing. Had no idea why. Signed on and found out there was a Capital One Neiman Marcus account that was past due 6 months. Never did I get a bill in those 6 months and never have they reached out to me. I contacted them and paid what was owed immediately on this same day. The initial amount was $147 but 6 months interested + late fees bubbled the small amount. Whether I got the package or not, I wanted to get this negative off my credit and paid them in full that day. Do I have any recoarse with them on getting my credit scored back up? As a creditor, they should have reached out to me at least once when they were getting undeliverable mail sent back to them. I have proof our mail was set up for forwarding with the USPS and not once did I get any mail from them.
It is not all that common for Capital One to be helpful to you in this situation. You can try to get them to agree to delete the negative reporting as a gesture of good will, but I would not have high expectations. More of good will letters here: https://youtu.be/486lAZJQ4wI
Michael, I had some financial hardships about two years back after being unemployed for 2 years. I have since found a job and started making things right financially. During this process Capital One sued me, and I answered the petition. I owe Capital One about 5.5k. I have been trying to contact them about a settlement. I started around half and they haven’t budged, saying they have a lawsuit against me. Is it best to hire a local attorney and let them deal with Capital One? I don’t need to have wages garnished at a new job. They are my last item and they are not budging. They want full payment. They offered to take the 50% as a down payment and spread out the rest over 11 months get this IF I SIGN A SUMMARY JUDGMENT PAPER. Any help is appreciated. I am not signing judgement papers and I have not heard anything from the courts since I answered the initial petition a year ago,
Thanks
Settling when sued is often at a premium. You can probably get them to take less, but 50% off is not always an options once sued.
Here is more about settling when sued, and if you need payments, the stipulation to judgment being common: https://consumerrecoverynetwork.com/question/can-you-negotiate-and-settle-a-credit-card-debt-if-you-are-being-sued/
Thanks for the insight, what do you believe a reasonable target goal should be?. They have offered 90%. I can comfortably do about 70%,but the payment ideas kind of spook me. You never know when layoffs are in order.
I think you have a decent shot at the 70%.
Thanks Michael, it seems 70% was sufficient. I’m glad to have that chapter closed. Thanks again.
Thank you for this information. I almost “cut my own throat” and was going to sign up with freedom debt relief. I knew from a family member that Cap 1 would sue, but the rep assured me their “legal partner” would take of anything like that. I owe about 30k in all with about half in 2 Capital one accounts. I declared bankruptcy in 2006 and was doing well until I signed up to buy a money pit house for my daughter and her large family. What are the odds I could do another bankruptcy? I got the house in 2011. Had to retire for medical reasons in 2016. Only getting 1300 mo. Daughters been struggling to pay since divorce so helping her out , I’ll be underwater soon. Can’t seem to qualify for debt consolidation loan either. Any suggestions?
You can file chapter 7 again if it has been 8 or more years since you last filed.
Hi Michael, I am grateful to have found your site!! I called Capital One when I knew I could no longer afford to make payments due to income reduction and other unforeseen issues. Until that time I had made payments on time every time for over 16 years. My credit score was in the upper 700s. The only thing they would do for me was put me on a plan to not charge me late fees each month. I have talked to them many times to try to do a plan where they lower or stop the interest and allow me to pay a smaller payment and I am always told this plan is not available. One cust. rep said “yet” which tells me there is a plan available. Meanwhile they keep charging interest every month and now I can not ever catch the payments up. I feel they are just adding the interest up to get more money before they will give me a work out plan. My credit score has gone down to 580 and I have had other credit card companies reduce my limits because of this. I want to pay what I owe, but I do not see how I can ever get out of this if they keep adding interest. I have not made any payments for over a month. Any advice? Thanks so much!!
Check out this article about how to get Capital One to approve a hardship plan once you miss a payment: https://consumerrecoverynetwork.com/hardship-payment-plans/
Hi Michael, thanks for all the info. I have a Capital One Card that was charged off in 2016. We were in financial difficulty and there was no way to make the payments. Their Hardship Dept had an agreement with me to pay 25/month which was deducted directly from my checking account monthly. All of the sudden in 2019, the stopped taking payments and I got a debt collection letter from one company in March and then in September got served from Cooling & Winters a collection attorney in GA. I went to court but apparently they asked for a continuance and we are due back on the 28th. I tried to contact Capital One to ask why they stopped collecting but the phone is automatically routed to Cooling & Winter. It looks like Cooling & Winter have been asking for info as I have been sent copies of my bills from Capital One thanking me for the inquiry and the say “This is not an attempt to collect a Debt” on them. I don’t deny I owe them $11K but thanks to Obama Care and my husband finally getting a decent paying job in Sept.of 2018, we owe back healthcare subsidy of $10,000 to the IRS. Do you think I have a chance of settling for less than owed?
The outcomes are way better out of court, for sure, but you can still settle when sued.
Are you able to pull 50 to 80 percent together in a lump sum?
Michael, thank you for all your help. I found myself over extended and unable to keep up with all my payments. I had considered bankruptcy, but really didn’t want to do that if at all possible. After reading and watching all your advice/recommendation I was able to settle or come to agreements with almost all my accounts. The only one that I couldn’t get to do anything was Cap One. Unfortunate it’s also my highest balance. I had seen a lawyer and decided bankruptcy would be my only option after all. The same day, after meeting with the lawyer I called Capital One once more. The account was now just charged off and on their recovery. Everything then changed. They took 20% off the balance and agreed to whatever payments I could afford. My balance is now 12k. My question is this, will this charge off age from the time it was placed or will it hurt me for 7 years after I pay it off, which will take about 5 years? Also since I settled with their recovery would you expect it to stay there, is not get sold somewhere else as long as I keep payments as agreed?
That is too much to settle for in this situation. I highly recommend filling out your user profile and scheduling a call with me, or one of the other counselors. You can do that by clicking the get debt help tab at the top of the page.
Hi
Recently Capital one filed a lawsuit against me collecting $2700. I called the company handling and made payment arrangements signed agreements and dent it back. They have sent the paperwork to capital one then will send to courts that’s what I was told by collecting agency. I am just concerned that everytime I call I have to explain everything about where my account is at moment. I just dont want someone to show up on my doorstep again for the same issue or worse. Any advise appreciated.
Who is the company collecting for Capital One?
It sounds like you signed a consent, or stipulation to judgment, is that correct?
Hello, my dad doed 8 years ago, he was the primary account holder and he added mom and i to acct so we could have a card, as my dad was dying and i moved in back in to help my mom take care of him. My mom never contacted Capitol 1 that he died and she has kept making payments. Now, today,. my credit karma shows my score went way up and i did know why. Well.
Trans union and Equifax both reporting that balance went from $8,500 to Zero! Between 12/1/2019 and now. Equifax removed the card history completely. I logged in on my Dads Capitol 1 acct ad it still shws balance mentioned above
When i tried to use Capitol o es free credit score serv., it denied me cause it said that the primary acct holder was reported deceased. .. now i do t know what to tell my mom to do. ..thank you for your advice
What is your mom’s credit report showing?
My moms credit report still shows capotal one and the nal of $8,506. So i am confused, but glad, it was removed from mine, cause its not my debt, i just ran errands and bought what my dad or mom requested
I would talk to an experienced debt collection consumer law attorney in your state about this. Perhaps there is a way for her to dispute and get this removed from her credit.
The issue with her continuing to use the card after his passing, when she was not the account holder, could be something they bring up, so talking to an attorney with experience may help her plan.
Michael this is great info and hopefully you have got someone’s attention. Here is my experience,,,, In May 2019 I had a police officer serve my wife with court documents saying Capital One was suing me. I called the lawyer whom Capital One had hired to persue legal actions. I explained to there lawyer this was kind of dirty the way Capital One did this. I explained that I had contacted Capital One 3 years prior to this notice and explained my life drastically changed . I said I became disabled and started the long process of applying for Social Security Disability. This put a huge financial strain on my family loosing my income. The Capital One lawyer apologized over and over. He said I am very sorry and this lawsuit will be disregarded immediately and I will notify Capital One. He said maybe you can work something else out with them but I have terminated the lawsuit as we speak and notified the court. So for anyone that becomes disabled I found out Capital One can’t touch Social Security Disability. Actually if you set up a ssdi bank account very few organizations can take ssdi money. If you decide to pay them then that is your choice. I am going to negotiate with them just because I know I am responsible for the charges I made. I would charge stuff on my card and pay it off. Life has sudden unexpected changes . I will make another Post to let everyone know my experience of paying off my debt I owe Capital One and how Capital One treats me. I’m sure Capital One broke some disability law by suing me. They knew my situation and sued anyways.
Capital One has started harassing me to collect on debt acquired when they bought HSBC and Orchard Bank. This debt goes back to 2005.
Can they sue me for this?
When did you stop paying on the account?
What state are you in?