Short answer
Capital One is the credit card issuer most likely to sue in order to collect, and its own settlement letter says it will report a settled account to the credit bureaus as settled with an outstanding balance. Both of those facts should shape how you handle a Capital One debt.
Key points on this page
- Capital One is quick to use the courts to collect on delinquent accounts, more so than other card issuers.
- If your debt is mainly with Capital One, bankruptcy protection is worth serious consideration.
- Item 9 of the Capital One settlement letter states that if the account is settled before charge off, the remainder of the balance is charged off and the account is reported to credit reporting agencies as settled with an outstanding balance.
- Item 8 of the same letter states that forgiven principal of 600 dollars or more is reported to you and the IRS on a 1099-C. A balance that has been forgiven and settled by agreement is not an outstanding balance.
- Reporting a balance that is no longer owed falsely characterizes the trade line and skews debt to income and utilization figures, which can affect approval and interest rates on later loans.
- The coupon or free gift in a Capital One collection letter is a collection ploy to get you to call. Since this page was published, the reporting problem on settled accounts is being addressed through disputes with the credit bureaus.
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.
and yes the plantiff is Capital One on the judgment
Good morning,
I have a judgment with Capital One I am trying to get in touch with the lawyers that took the case, the problem is that 3 phone contact numbers are not valid numbers anymore. I would like to know who can I get in touch with @ capital one to try to settle the debt or any other help. I owe just about $1700.00 since 2007 and just want it off my credit report already. Thank you for your help.
Start with the general customer service phone number for Capital One. Tell them you wish to pay an older account that they sued you for, and have had no way to contact the attorney they hired. You will get connected to the recovery department, and will have to repeat yourself, and perhaps a third time when connected with someone who works on really old stuff like this.
Are you certain it was Capital One that sued and got the judgment, and not a debt buyer? Do you have a copy of the lawsuit, and does is list Capital One as the named plaintiff?
Yes, thank you for your detailed and prompt response by the way. Actually Michael I did found a number that transferred me to the new lawyer that took on the case, now they are saying that not only do I owe the $1700.00 but also a 4.75% interest…? Is this legal for them to do? They gave me some steps that “maybe” I can be eligible for to reduce the debt by 50% but that would put me at exactly what I owe them, which obviously doesn’t help me…should I have a lawyer on my behalf to see if I can get to pay the amount that I owe only? there is nothing in regards to a interest 4.75% fee to be paid in the judgment either…I appreciate your help
Judgment interest is capped by your state legislators, and it is very common to see double or more than what yours is at. But it is odd that there is no reference to the amount of judgment interest set by the court. You should run this by an experienced debt defense attorney. If you post the name of a nearby city I can send you an email with contact details to attorneys with the experience you want, that are nearer you.
The areas nearby I have are Sarasota, Port Charlotte, Punta Gorda and Fort Myers in Florida…thank you I appreciate your help
Thank you for your honest and fast response. Should we use anything from a 401K? We have a small one that may be used to settle the larger bill. Should I negotiate 40% of the total owed?
If this goes legal, will we first receive a demand letter from a legal firm?
I may be able to get a little money from family to help and I know I will eventually find a job.
Thanks!
401k money is typically protected from creditors in a bankruptcy, which means when filing say, a chapter 7, the 401k money can sit there and work for you undisturbed. And because of the penalty costs and taxes owed when you early withdrawal (for a non permissible purpose), you should have a really compelling reason to touch your 401k. There are solid arguments you can make for using that money to settle debt and avoid bankruptcy, but my experience over the years when I dig close, is that bankruptcy is better, unless you can borrow from your 401k, rather than withdrawal. And there are reasons to avoid that, or that you would even be prevented from doing so.
You should get a collection letter from an attorney, and if that attorney is in state, it is a warning shot across your bow that your risk of being sued have increased dramatically. But try to come up with plan now if possible. Settling when sued still happens… a lot. You just typically do not save as much.
Forgot to ask…if I look at the account online with the original creditors, will this instigate communication and a new date of delinquency? I read that if I communicate with the collections agencies, it refreshes everything…So confused.
sdk – There is good information online about dealing with collection issues. But there is really bad information too, and it often resonates well because… you cannot afford to pay the debts anyway.
Unfortunately, at least for now, that is you. There is not much to plan for if you cannot pull together the money to pay these settlements. If you could, or even if you were able to accumulate money monthly and save up to settle,I could offer some suggestions. But paying the mortgage and other bills late means there is nothing left. So calling collectors to get a plan together is not going to serve a purpose, and they are really not interested in hearing from you when there is nothing productive to discuss. But make no mistake, if your goal is to resolve unpaid debts after charge off, you will have to work with debt collectors the vast majority of the time.
It sounds like right now you may need to just stand pat. If the collections becomes a court issue, you can drill into your options,and an attorney will come in handy for sure. And if you are able to pull together some money, or get back to work and have some additional money coming in steady, plan your strategy from there.
No need to login to your online accounts that are closed, charged off, and now sold MCM, or assigned to First source for collection. But if you did, it would not restart any dates for delinquency. Just be sure not to make a promise to pay, unless your intention is to settle the account, and you have the money already.
Michael,
I have read through all of the above information and am requesting guidance on what to do.
My husband had two credit cards, one GM which was bought out by Capital One. The second is a Capital One card that for some reason CO changed the account number on. Go figure. Both cards are in collections due to family medical issues, a flipped house that we purchased with ongoing issues and now due to my loss of a job and no income. We are hanging on, paying the mortgage late, my car payment late and the household utilities and my smaller credit cards that my creditors worked with me on.
As for his two credit cards, we received a letter that the Capital One card was charged off in April. In May we starting getting collection letters from First Source offering settlements of 5467.44 on a 9112.39 balance or 2 other payment options which we can’t do.
As for the GM card, now owned by CO, we receive three letters from MCM offering a 40% then 30% settlement on a $6605.00 balance. We can’t do that either.
We have not called or responded as all info that I read prior to today said not to respond and deal only with the original creditor. I also read info that stated that since we did not have a contract with the collection companies, that we have no business with them. I have also read that they likely can not verify anything owed, i.e., the paper trail.
I do not want to get sued, but am in a mess. I have looked at selling my house, but I will be upside down simply by paying the agents commission. I am trying to find employment but thus far, nothing.
Can you please provide me some guidance on what to do with the credit cards? I do not want to file bankruptcy. Should I contact a lawyer that will cost me more money? I should also add that my husband has a DC, but long prior to all of the above, arrangements were made to pay off the account in monthly payments, auto debited each month.
Please feel free to email me privately for any further info that I opted not to include.
Thanks,
sdk23454
Hi Michael,
I have (2) CC’s that were charged off with Capitol One that they are reporting on monthly and have assigned Northland Group to collect upon. They both are currently 3 years into thier SOL’s and the amounts are $1687.40 and $1317.36. The latest offers via mail from Northland to settle them are 60% and 45% respectively. I’ve taken to working on cleaning up my CR as much as possible and although I know that paying these will not improve my score but I figure that my CR shows I at least paid something will be better than it showing the full balance as still being unpaid and charged-off. My plan is to call Northland and first offer to settle them around 35% of their totals but go no higher than 45% for both since they are already offering 45% on one of them. I also plan to request a settlement letter be sent to me before I make any payment. What do you advise I request that they put in the letter in terms of listing the debts as paid on my CR? I understand that Capital One are the only ones who can change the status on my CR so are they bound to change the status to whatever is listed on the settlement letter from Northland Group? I’ve read that Capital One will try and report the remaining balance as upaid on CR’s, what should I request in the letter to keep them from doing this and should I be concerned about them trying to send me a 1099 for the balance? Thanks for your time.
If you settle and save more than 600 dollars, it is not a question of whether you should be concerned about the 1099c from Capital One… you will get them. That said, you may not owe tax on forgiven debt resulting from settlements. See this article for more details: https://consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/
Capital One has been reporting a forgiven amount of settled credit card balances as still owed on credit reports for years, and I am of the opinion they are doing so incorrectly. Read more about this here: https://consumerrecoverynetwork.com/why-does-capital-one-hate-america/. You can see from some of the comments of this page what I suggest you do as a follow up to settlements you take them up on, where credit reporting of a balance remaining owed persists.
Your goal of getting 45% on both accounts would be mine if I were working the file. Getting lower deals approved on Capital One accounts (that are still owned by CapOne) is not common. I see one here or there, but 45% is the most common floor to date.
Thanks for the fast reply Michael, I appreciate your advice.
Forgot to ask, what are your thoughts on how the settlement letter should be constructed, should I stand firm on them stating that the balance would be zero once the settlement is paid and typically would Northland be responsible for creating the letter or Capital One. And lastly if Northland does construct the letter is Capital One legally bound to adhere to the terms of that letter? Thanks again
If you put the deal together with Northland Group, the settlement letter will likely come to you from them, and on their letterhead.
You should look for the elements I outline in this report: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/.
Capital One will be agreeing to the terms outlined by their agent, which is Northland Group. You will not have much problem getting everyone to agree that the balance owed upon acceptance and clearance of funds is zero. That does not mean Capital One will accurately show that on your credit report. You may actually need to decide if the settlement getting completed is the priority, if Northland Group is not able to adjust any written portion of their agreement with you. If you want another set of eyes on the letter let me know when you get it.
Will do, thanks again Michael.
Ok I am having problems. I had a cap one credit card. I lost my job in 08 and asked them to work a deal per month so I could it off. NO DEAL. I had to let the account go and my last payment was Jan 27 2012. I recieved a 1099c in Jan 2015. My credit reports show Collections /Charge off and they have a past due amount listed. I called and spoke to a number of people and supervisors plus the despute team. Any ideas. Thank you
What is goal you are trying to accomplish with Capital One?
Hello Michael, I have a cap1 in the amount of 1645.00 that has been on my credit report since 2010. I am currently in the process of correcting all the negative marks on my credit report to boost my score in hopes of purchasing a home. I have contacted cap1 in reference to this debt to try and pay off one way or another, and they refuse to take any sort of payment there also isn’t any collection agency involved.. They stated that the debt has been forgiven that I need to contact the IRS. Also, they are still reporting it as late every month to the CRA’s. However, the status states “closed-credit grantor”.. I have never spoken to, or received anything from cap1 since 2010 in regards to this cc, and never agreed to any forgiveness terms, or payment options in the past. So I am at a stand still with this account and no idea where to go with this… Hope you can help and lead me into some sort of direction.
This is an interesting catch 22 with Capital One. I have a couple of questions before offering feedback.
Is Capital One reporting on your credit reports that there is a balance owed as of today?
What state are you in?
Have you received a 1099c from Capital One?
Hi! I am so glad I found this article. I paid off an Capitol One acct back in 2010. it shows as a charge off. I called them to see if they can fix it and they refused. I spoke to a supervisor who also refused. They told me that they do not do pay for deletion letters. I told her that I have a letter stating that I paid the debt in full and owe $0. She says that I have to wait 7-10 years for it to be removed. The only thing they can do is report it as paid in full to the credit agencies. I told her my credit report shows that I owe $0 and she said that is enough. I have another card with them that is “inactive” but I only owe 229 on which I am paying in full. I asked if once the amount is paid, if the account is reinstated and they said no, it is a closed account and there is no way of reopening it. I have a credit card from another company, and Capitol One bought off that company so now that account is with Capitol One. (this account is in good standing.) I explained this to the rep and what a good history that account has and why can my other account be reinstated. They still refused. Not sure what to do here with the in active account and how to handle the charge off.
If you are looking for Capital One to delete the paid charge off, it is not going to happen. Not with them, or virtually anyone else. The fact it is showing as paid and zero balance owed is about as good as it will get… unfortunately. And it will be on your credit reports for 7 years, not 10.
Try not to get hung up on the fact that you have a charged off Capital Once credit card on your credit reports for 3 or so more years. If you maintain all other elements of your credit reports, this one paid collection account would not impair your credit all that much, this long since it occurred.
Does your other Capital One account, the one showing up inactive, have any late pays associated with it?
Hi Michael!
After reading all the comments here I am unsure what to do! I just received a letter from a collection agency with the name of Nelson, Watson & Associates, LLC for my capital one credit card. I have a balance of $600. I am trying to fix my credit score to get a mortgage loan. But reading all the comments here made me unsure what to do either way I believe it wont fix my score.
Thanks or your time.
Juliet
What is your credit score now?
For Nelson and Watson to be contacting you to collect for Capital One, your debt has not been paid for quite a while. That means the damage to your credit score is done.
You may not get a bump in credit score immediately after dealing with this collection account, but any loan officer or broker could require this be taken care of before you can be approved for the new mortgage anyway.
Credit score is 490 and age of credit history is 2 years. This was just affected due to divorce in process. I have two accounts with Capital One. I dont have anything on my credit report except student loan. I wanted to fix it before its too late. Would it be smart to just pay the amount now to avoid later trouble? I am just worried I would never rebuild my score because of this.
Given your goals, yes, it would be good to either pay this off, or negotiate a less than full balance payoff that accomplishes the same thing (just be sure to get any agreement in writing if you are settling with Nelson and Watson for less).
Michael,
Thanks so much for your help! I will fill out the contact information!
In regards to the original judgement that was originally defaulted against me: The court’s clerk didn’t see that I had responded in the system (overlooked they said) my response to the summones within the 30 days, and they automatically placed the judgement against me. I had to petition to have a hearing to dismiss the judgement, since I was the court’s fault. Now I am back to square one and Capital One’s lawyer resubmitted a request for a court date for Judgement.
Do you recommend I try to settle before the Judgement occurs? I am trying to obtain a personal loan to see if I can pay 1/2 of the debt in full, but I am nervous that they will try to come after me for the remaining balance.
thank you for your time!
Liz
If you have the resources, and settling with Capital One makes more sense for you than filing bankruptcy, yes I highly recommend negotiating and paying the deal before a judgment.
Hi Michael,
I was summoned by Capital One for the amount of $21,922.10. I responded within the 30 days and requested debt validation. The court overlooked my response and they gave me default Judgement. I went back to court to prove that I responded, and they dismissed the Judgement. The lawyer never responded within the 30 days of my request for debt validation, or proof that he is licensed in NM. Later he provided Capital One statements at the court hearing to dismiss the judgement, which was 7 months later. I had stated if he didn’t provide within 30 days that per the FDCPA, that the debt would be dismissed. Do I have a case to fight this?
The Law Firm for Capital One is Farrell & Seldin represented by James Grubel. When I talked to him on the phone, he went ahead and submitted a fraud request per my response that there was a $17k charge on the credit card statements that didn’t belong to me. They said that it was a credit balance transfer, but I do not agree since my previous credit card balance was only $7k, and I have proof on my credit report that that account was closed in good standing with less than the credit limit. I am trying to dispute this but I would also like to settle the remaining debt with them. James Grubel originally told me that Capital One would take 50% plus court costs if I pay in full within 3 months, otherwise I have to pay the whole balance. He said that Capital One wouldn’t consider less unless I submitted a letter to them, stating my reason as to why I can only pay less. He said it usually has to be a life or death situation for them to accept. I also read reviews that this Law Firm is very shady and either have sent payments back to clients, or did dishonest things with payments, so that they could go back and pursue judgement, resulting in garnishing wages.
A little more history, I stopped paying the credit card in October 2011 due to my mother-in-law being sick with cancer, as she couldn’t afford her treatments. My husband later lost his job 6 months later, and we continue to struggle with trying to pay off debt. We tried to file chapter 7 but since my husband recently got a new job, we no longer qualify. At this time I can only borrow about 45% of the debt to pay it in full. Do you think i should write a letter to negotiate? My two younger children are having surgery this summer, one of them to get his tonsils out due to Sleep Apnea and the other for ear tubes due to chronic ear infections, and with my high deductible Insurance plan, I will be responsible for 10% of their surgery bills, so money is very tight for us right now. I would be interested in your services to help negotiate, or have 1 to 1 counseling if available. I live in Albuquerque, New Mexico.
Thank you for your time!
Liz
Liz – I am not clear about what went down with the judgment, but from the way I understand what you shared, I would highly recommend you connect with an experienced debt collection defense attorney and go over the details.
When it comes to settling Capital One credit card debts, 50% is often the floor. There are better deals that get done, but not lower by much, and not at all common.
I do not currently offer coaching, or direct negotiation services. You can consult with a specialist in the network, who has been helping CRN members and site readers for many years.Just fill in the contact form on this page and submit. I will pass that on so you can schedule a consultation.
Hi Michael- I owe capital one about 7k in credit card debt. It’s all on one card. I have wonderful credit and have never missed a payment or made a late payment. However, I’d like to settle this balance in one lump sum. If I call cap one and offer to pay them 50% in cash to settle, what are my chances? After reading the comments, I’m scared of being sued, not having a “real” zero balance, etc…
Any advice would be much appreciated!
Thanks, Emily
Emily – You have to be several months behind in order to negotiate settlements in general, and in order to get the best savings from settling with Capital One.
Do you have other accounts with balances owed that show on your credit report other than Capital One?
Michael,
Thanks for the quick response! I do have other balances owed on my credit report:
-Credit Card with Chase (8K)
-Car Loan with BB&T (9K)
-Student Loans with Sallie Mae (40K)
I am current on everything and trying to pay each one off, slowly but surely. The concern is that I have no savings and typically live paycheck to paycheck (with a little wiggle room). I’m receiving a large commission check soon (about 8K) and want to use it wisely. If I can avoid paying the full 7K to capital one and settle for less, I will finally be able to put something into a savings account. Since my credit is good – I’m willing to take a small hit in order to settle my debts. Would you recommend being behind on payments and trying to negotiate in a few months? I make the minimum monthly payments on everything as of now.
Emily
Thanks for the additional details Emily.
I would not recommend settling at all. I would look at how to deploy those funds you are getting in a strategic debt roll up payment plan. Here is more about debt roll up (may give you some ideas): https://consumerrecoverynetwork.com/debt-roll-up-pay-down-credit-cards/
In direct answer to your question, yes, settling with Capital One will typically be an option in months 5 and 6 of missed payments. But your file is going to look like one they should not settle. You will look like a file worth suing to collect on. And that is because you have other debts that will be kept current, so you appear to have a steady income to pay everyone, including larger debts, but have selected CapOne to miss payments to. That is, at least generally speaking, how to show folks that collect debt for a living, that a nudge with a lawsuit would put them back on your priority to pay list.
You would likely fair better in this effort if the student loans and auto loan were the only ones being paid, while all unsecured creditors are not.
I’ve heard of the debt snowball method actually. It’s good to revisit that again!
I’ve decided to keep $1,000 “emergency” fund and put the rest toward debt.
Thanks, Emily
Hi Michael,
My debt is all corporate debt but I am personally liable for most of it. Small corp. in MA.
I owe Cap One about $40K, currently 3 months of no payments.
Do you see them treating business debt differently?
I have other unsecured debts totaling over $200K, ½ of this to a Wells Fargo account. I had been planning on bankruptcy, but the business is doing fairly well right now and I could raise perhaps $50K over the next 6 months.
Do you think I have a shot or is this just too much debt? Does the fact that it is corporate, not personal change things?
I have already hired a bankruptcy atty, but with the new work we’re getting am considering settlement
Thanks,
Steve
Steve – Capital One settles business debts too. The settlement targets are still 50%. The Wells Fargo accounts can settle at 35% currently, but there are extra concerns when settling with Wells Fargo accounts that large. I would encourage you consult with a CRN specialist, and probably Paul. Fill in the little form to the right and submit. I will forward that to him so he can coordinate a time to talk this over with you.
We currently owe approximately $31 000 on a Capital One credit card. We recently moved to Australia from the US and cannot afford to pay the balance (due to moving expenses, high cost of living here, now only 1 of us is employed, etc). We have not made this month’s payment and have called cap 1 to let them know that. They will not discuss our options at this stage as we are only just in default. We are curious to know what would happen if we default entirely on the balance, given that we have moved permanently to Australia. It seems unlikely that we would be sued by a US company while living outside of the USA. Thank you very much for any insight you may be able to provide.
Louise – It is highly unlikely CapOne would sue there. If you are certain you are not coming back, not much is going to happen with the debt if you do not pay it, other than your credit reports taking a hit, and the credit scores getting boxed around for a bit too.
There are instances of people being sued and ending up with judgments they never knew about, but that kind of thing happens whether you are in the US or leave it, and is happening less and less.
If you do get to a place where you want to resolve the debt, you have low interest repayment options with Capital One, and will also be in the drivers seat with collection companies hired by Capital One.
Do you see Capital One currently working with there clients with settlements or not.
Yes. I just reviewed a settlement last week for a touch under 40% with Capital One direct. Another comment today suggested their account would not go below 70% settlement (though it was not completely clear if they were dealing with an outside third party debt collector).
I’t’s been 7 months since I stopped paying Cap One. It was charged off last month. I’ve been trying to negotiate a settlement with them before charge off but they would have none of it. After charge off, they are asking for 70%. I would like to settle at close to 50% maybe 60% at most. They have offered with the 70% settlement a payment plan that involves 30% down and $50 monthly payments.
Today I received a FEDEX letter stating that if payment arrangements aren’t agreed to soon, I would get legal ramifications.
What can I do? They seem very unmovable. The agent assigned to me has called me the past two weeks to see if I like to take advantage of the offer, but I always refuse.
Please help. I don’t want a lawsuit.
Dan – I have worked accounts with people where 70%, even 80%, was as good as it got with Capital One. Heck, there are files I would not even suggest settlement for as an alternative to bankruptcy, due to how much of the debt consisted of Capital One accounts and amounts. There is something about your file that has them sticking where they are at, and because Capital One is more prone to sue in order to collect, you may want to consider taking the deal on the table now, but only if you can swing it financially. Otherwise, you may get something worked out more affordable payment wise later, just no savings from settling.
What was the precise verbiage used about legal ramifications?
Thanks Michael,
As an update. After reading all the post about how hard it is to work with Cap. One, I decided to take the offer from them to avoid legal action. I believe their next step would be a summon. I have about 20K worth of debt with them. Today I called them and spoke to them at length to try and get it settled. I think I spoke with two reps, and three managers. I spent at least an hour and a half with them and threw everything at them I could. I tried using facts, and finally a little begging. All to no avail. They stuck to there 70% offer.
Since I don’t have all the money to pay the 13,770 amount as a lump sum, they gave me the option to pay in 24 monthly installments. So i took it.
I don’t know what it is with them. They won’t budge. I’ve dealt with other creditors and gotten anywhere from 30-50% of balance.
I don’t have any assets other than a home with some equity. Michael, how much legal fees could they add to the balance of the debt if they won a judgement in court? That’s what force me to take what they offered.
I hope this helps anyone reading this. My experience with Cap One was difficult to say the least. I tried everything and they wouldn’t budge.
Also,
I have been with Cap One since 2003.
Michael, as an afterthought. I see that you negotiated a 40% settlement with Cap One. How much do you charge for your services?
I stopped offering direct services, or even one on one coaching, last June. If I work a file it is a severe hard luck scenario, something interesting and challenging, or just something to keep me sharp. And I do not charge for those.
Forgive me Michael, but I’m new to your site and after reviewing it some more, I think i should have used one of your specialist to negotiate my settlement with Cap. One
Ive looked into settlement companies that charge an arm and a leg and other independent debt negotiator that would charge at least 25% of savings. I never used any of them since I believe I could do better. Your 15% fee is the best I’ve seen and you guys appear genuine.
Do you think it would be a bad idea if I hired you guys to renegotiate with Cap One?
The call ended with them wanting me to call them to set up auto payment once I receive their written settlement agreement.
Just wondering.
Thanks again.
Dan – There are specialists with CRN you can work directly with, but they do not offer direct negotiation services in all states. The one on one coaching may have been worth the while too. Regardless, I am not sure anyone would have gotten a better outcome, including me. There are files with Capital One (Discover and AMEX sometimes too), that are just not gonna get a great deal. There are a host of reasons for something like this to happen. I won’t endeavor to outline those reasons here, but I think yours is one of these files.
We have had the lowest full service fees in the industry since 2004. The specialists you can still work with agreed to continue to support the same business model they always have with CRN, so that is still an affordable option.
capital one sued me and they already attempted to take 1991.85 out of my bank account which I had no where near that much so the bank declined it and charged me 75.00. I have stopped using my bank account so that they wont take all I have. I now have received my income tax and am using my boyfriends account. I would like to get it payed off so that I can go back to using my own bank account but I don’t know who I need to get ahold of to get it settled.
Marsha – You generally want to get in touch with the attorney that Capital One used to sue you in order to negotiate the settlement. If you learn they are no longer able to work the file, you could contact Capital One directly.
Hi I am having issues with capitol one. I had a card that i couldn’t keep paying becuase I had health problems. Well now, the card has been charged off with a bunch of extra fees that total $2400 and some change. The original amount was $2000. I tried to ask for a settlement. The agent was demanding high monthly payments or the total balance. She kept talking about a lawsuit with Capitol one. What can they do to me? Will they take money out of my bank account? or garnish my wages? What exactly can they do? I would like to work it out with them, but because I cancelled the high monthly payments 2 times, the agent took the settlement off the table. I became upset and hung up. What is my next step. I felt so intimidated with that agent.
lita – Have you already been sued for the Capital One account? If not, how long had it been that you missed payments, before agreeing to, then stopping the monthly payments? And were those high monthly payments ever made, or did you cancel them before a single one of them went through?
Hey Michael,
I have recently been dealing with Capital One about my old credit card that charged off back in 2008. My balance was between 1100-1200. I originally contacted them about settling my account after my wife and I spoke with a realtor and lender trying to get pre-approved for our first home. We are trying to raise my score a few points by settling this old debt. I was offered a settlement of $575. I sent them a money gram the next day with that amount and was told a letter would be at my house within 7-10 business days. After two weeks, I did not get the letter. I contacted them again and was able to get them to fax me the letter. I gave that to my lender who forwarded it off to the company she works with to help raise my score. I was told to wait 7-10 days for that and then we should have our pre-approval. Eight business days later I am contacted by the lender telling me that they were having trouble with Capital One reporting settled but with a balance of about $570 instead of a zero balance and they didn’t understand why. We were all under the impression that when you make a settlement and honor it, the rest of the past due balance would be forgiven and it would be reported as settled with a zero balance. When I contacted Capital One again I was told that yes it was settled and they would not be attempting to collect a debt anymore but because I did not pay in full, it will not be recorded on my credit report as a zero balance. I was told this today and was unable to get back in touch with my lender again to see how we should proceed from here. I am worried that because Capital One is not putting zero balance, we will not be able to do what we are attempting to do and get our pre-approval. This is becoming very frustrating because we are expecting a newborn in a couple months and are trying to be in our own house before then. Is there anything that we can do to get this taken care of? I dont know if Capital One is doing something they shouldnt be regarding the settlement and if so how I should proceed to take care of this problem. Like I said, I was under the impression that a settlement takes care of the debt completely including forgiving the additional past due balance and reporting a zero balance. Am I wrong? I know that’s how it works with pretty much every other creditor and my lender said that she has never had a problem like this before. What should we do?
Thanks in advance,
Kade
Kade – Capital One is the only credit card issuer that I am aware of that thinks they should be reporting a balance still owed, even after they agreed to a settlement, and a balance is no longer owed. I wrote about that here. Did your settlement agreement from Capital One have some of the same language in the letter I link to in that article?
I would encourage you to file a complaint with the CFPB here: https://www.consumerfinance.gov/complaint/. Filing the complaint against Capital One under the credit reporting heading makes the most sense to me, but you should probably file against Capital One, not the credit reporting agencies in my opinion. Capital One has staff assigned to the CFPB complaint portal that are better skilled at dealing with your issue than the people you will reach on the phone through general information lines. You should get a direct response within 1 to 2 weeks (based on feedback I am getting).
Please do keep me posted with how you progress with this.
Michael,
This account charged off in ’08. I know it had been sold off a couple times between then and now. If I had received a collection letter from Capital One I assume it would have been back then but I do not have one or recall one. The collection agencies would send their letters, those of which I never kept either. I contacted Cap One myself trying to settle. Everything was done over the phone.
As far as filing this complaint, would that put a dispute on my credit report? I am being advised not to do the complaint if it will put a dispute on my report because I can not have one when trying to buy a home. If it will not put a dispute on there I was told to go ahead and do it if we think it will help.
Thanks,
Kade
Kade – Did the letter you got faxed to you, that you reference in your above comment, speak to credit reporting at all?
I am not aware of any complaint filed with the CFPB, that later resulted in being interpreted by the credit reporting bureaus as a formal consumer dispute, of a type typically sent directly to the agencies as part of your rights under the Fair Credit Reporting Act. It is even more unlikely that would occur when your complaint is being directed to CapOne, not one of the credit bureaus. You may want to be clear in your complaint that you are not wishing to note your reports with the credit bureaus as under dispute.
I was sued in 2008 by capital one for a balance of $4000. I do not deny the debt but I have not been the smartest about it. I am now older and wiser and trying to clean up my credit. Is there any way to settle with Love, Beal and Nixon in Oklahoma and get that taken off of my credit report? And I do not know whether it matters or not, but I no longer live in Oklahoma. I do not want to pay it off and it still show up on my credit report. What steps would you recommend to getting this taken care of? Should I contact them via mail with an offer? Thanks!
Natalie – Settling the debt with Capital One will not result in it being removed from your credit report. It is a judgment, so the part of the court record which is public. Negotiating a lower payoff with Love, Beal, and Nixon will result in the CapOne judgment showing as satisfied in the record, which would help you better qualify for certain credit.
I am a big fan of starting your negotiations over the phone, not sending offers in the mail. Offers and documentation, in my experience, are better left to the collection side to send.
Do you know the balance owed today?
What amount are you prepared to pay in a settlement?