On May 28th I received a call from alliance one claiming to be collecting a debt on behalf of Capital One. The original card had a balance of $300 and I hadn't made a payment in 6 months due to financial hardship. At first they were willing to work out a payment plan, then put me on hold and said that payment plans were not even an option anymore and I had to pay them that day or else capital one was going to pursue legal action against me. This was my first and only credit card so I had no knowledge about collection agencies and creditors and believed every word they had said. After telling them I could not pay a settlement that quickly I was put on the phone with a "liaison" between capital one and alliance one. She then proceeded to harass me and got me to consent to a settlement of $470.00 and $100 payment over the phone that day. She then told me afterwards that I would have until the next day to pay the remainder of the money and that I should get off the phone so I can start calling people to lend me money. After researching them on the web I found several reports about them as rip-offs and frauds. I immediately told my bank and they closed my account and reported any incoming transactions from Alliance One as Fraudulent activity. I also called Capital One and tried to ask if I could pay them and was told that the card was charged off and sold to alliance one and they no longer have anything to do with it. I have since contacted a consumer lawyer and he wants me to sue AOne in federal court in violation of the FCDA. He did explain though that this would not get me out of paying the debt, but would increase my chances of being able to settle and rid other companies of trying to purchase the debt. I'm very weary to do this since I plan to be moving out of country for my first real job at the end of august. I plan to contact another lawyer tomorrow to get a second opinion. I would like to settle with Capital One and pay them what I owe, but will not be able to do so until I start my new job. Can someone give me some advice on my options and what I should do?
Sorry for delay in responding, If Capital One sold the account to this collection agency then it is no longer possible to settle with Capital One. You can write back to the collection agency and request a debt validation and wait to hear back. This should stall them and give you some time to try and save up the money due on the account. If they verify then you should get back a hold of them and offer payment in exchange for deletion. There is no real hurry on this, if you don't have the money together then wait until you have all of it. They ain't going any where so they can just wait since they were so rude to you to being with. Don't take no abuse from them. Just hang up if they bother you again. If they try to sue, then you can negotiate with them later to settle out of court. But for that amount I can't really see them suing though it has happened before. Even if they did sue and you could not pay at that time to stop it. You can still negotiate settlement for dismissal of the judgment. That means it comes back off of the credit report once they dismiss it. You just need to send a copy of the dismissal to the credit reporting agency and they can take right back off. Best if you can just avoid court all together, that way you have leverage to negotiate off the collection agency listing off of the credit report. Also you won't be able to negotiate Capital One reporting, so for that I would suggest that you dispute with the credit reporting agency to try and get it deleted. Best of luck on this matter,
Hi Brianna! Based on my experiences of having Cap One accounts go bad I suggest that you pay that $470.00 ASAP! The extra $170.00 added on to an account with a $300.00 limit is a small price to pay. Since you plan on moving out of the country maybe you could sell some of your things in order to raise the funds. Now let me tell you about my experience with Crap One as well as my adventures with a consumer protection attorney. I had two Crap One accounts. Both has small credit lines and both went bad. All of this occured almost seven years ago. After inspecting my all my credit reports I've noticed that they are listed incorrectly or are being re-aged months at a time. Each report shows a different date of delinquency. So I suggest you keep track of your true date of delinquency and keep track on what's posted on your credit reports. One of my Crap One accounts has a judgment on me. This particular card had a $650.00 credit limit! Charge-off amount ballooned to around $1200.00 and the judgment is around $2600.00 at the moment. So don't think that the collection agencies won't bother with trying to collect on small amounts. My experience with retaining a consumer attorney has not been the greatest. I hired him to represent me against a creditor that was trying to collect on a debt that was out of the statues of limitation. I paid a large up front fee...a little over $700.00 PLUS the cost of filing in Federal court which is expensive..I think it was $250.00 or $350.00. Part of the filings are still lingering although it's been over nine months since we filed! I did recoup my out-of-pocket costs but the attorney has taken anything above that! So my take on your situation is that filing in federal court could be a lengthy process depending on how stubborn Cap One and the collection agency wants to be. Sounds like your attorney wants to get the collection agency on a harassment violation which would only lead to $1000 in damages collected. I don't know if they have made other violations...so there could be more. If the attorney is willing to work for free or nothing up front I guess it's worth a shot. However, in my experiences it's cost me $500 out of pocket just to have my attorney file a motion! I have a feeling that the cost of hiring an attorney, the settlement amount the collector is willing to take, and any damages that you *might* get will still result in you having to fork out close to or more than what you could pay now and be done with. Good Luck!
Some consumer attorneys work on a contingency fee basis insofar as the FDCPA and FCRA allow for attorney fees. What state do you live in? I may know of one.
Briana- *Disclaimer--This is NOT legal advice* I hope by now for the sake of your credit you have taken care of this debt by now. For the future you should know that Alliance One did not purchase your debt from Capital One. They were given your account temporarily to try to collect it for them on a commission base. If they can't after a certain amount of time, then Capital One takes it back and decides to either give it to another agency or sue you. This keeps going and going for maybe a year or so until they DO sell it to an agency that purchases debt. Alliance One is given certain guidelines for the amount they can lower the debt to. If Alliance goes below the set amount then they are most likely fined by Capital One. So yes, while a collection agency wants to get as much of the debt from you as possible to yield as much commission as possible, there IS a bottom line (usually between 80% and 60% of your principal balance plus all fees and interest). If you make a payment arrangement OTHER than the entire principal balance plus fees and interest then you have entered into an accord. It temporarily suspends the original creditor from suing/collecting on the original debt (principal balance plus fees and interest). When you miss or are short on a payment, even by a cent, the accord becomes null and void because YOU violated it and the original creditor can now sue/collect the original debt. There is nothing the third party collection agency can do about it. Your best bet is to try to work out a new accord with the third party collection agency. However, since it seems as though you backed out of a payment arrangement with Alliance One already you won't be trusted to go onto a payment plan and you have greatly reduced your payment options. Unfortunately, you do have to play along with collection agencies to get what you want. At this point they will probably expect you to pay off your entire account in ONE payment or you MIGHT be able to get a slight settlement (about 85% of your original debt) IF you can pay over the phone that day. Let us know how things worked out for you. Take Care!
