Hi, I posted for some help with Capital One a few months ago. After all the feedback and more research, I began trying to settle with them and well, I just haven't gotten anywhere! Here is all the basic info, some new and some old. 1. I made my last payment to Capital One on September 10, 2008. 2. My balance on September 18, 2008 was $1548. 3. I also stopped using the card in September. 4. My account was charged off 05/2009 for $2,369. 5. My credit report also states "account closed at credit grantor's request." 6. My current balance is $3266. 7. I've called offering $1700 and been told the lowest they will take is $2800-- which I don't have. I've been trying to settle for a few months now. 8. I recently lost my job. I don't own a house, a car, or anything else of value. 9. I live in UT. The address for the Collections info I've been mailed and also the listing on my Credit Report is a Utah address. And here are my questions: 1) What Statute of Limitations applies here? I've read in multiple places that the SOL for Capital One is 3 yrs (based on VA) but Utah's SOL for credit cards is 4 years. I don't have a copy of the Card Member Agreement... so is there anyway for me to ascertain what SOL applies? 2) Is it legal to keep accruing interest on a Closed, Charged-Off account? 3) How long has it taken other people to negotiate a settlement with Capital One? 4) If I get sued and I have no source of income, no assets, etc what exactly are the consequences? I really appreciate any answers, links, and resources to these questions. I don't have the money to consult a lawyer and without valuable resources like this website, I'd just be running around like a chicken with my head cut off. Thank you so very much to everyone that contributes to this forum.
1) Whichever state you entered into the card agreement with Cap1 governs-follow that state's SOL. 2) Yes. You signed agreeing to this when you signed up for the card. 3) If Cap 1 still owns the debt you will not be able to settle for 50%. 50% settlements come when your debt has been sold a few times and by that time this account has been on your CR for YEARS. You can maybe settle for around 80% right now. 4) A judgment will be entered against you and as soon as your have income your wages will be garnished for the entire amount, but most courts will take away a lot of interest. Basically, the more time that goes by, the lower you can settle. BUT, the more time that goes by the worse it is for your credit.
Cap One usually has a choice of law provision in their cardmember agreement stating that the laws of Virginia apply. If that's the case, you use the Virginia SOL and not the state where you entered into the agreement. It's hard to say what Cap One will settle for. They are very prone to sue, but they may settle for less. A lot has changed in the last year or two, so to say that the debt has to be sold a few to settle for 50% is not necessarily true. If you're sued, the first thing you need to do is show up and make sure they can prove the debt. If it's Cap One they will probably have documentation. Using the Virginia SOL, the debt would be out of statute later this year. Look for them to file just before the SOL is up. Once the judgment is entered, what happens depends on your state. Some states allow wage garnishment, some don't. There is usually a limit on what percent of your income can be garnished. Some states allow bank accounts to be garnished, some don't. In a lot of states you'll be called to court and you'll have to tell them what all of your assets are. You may want to see if you can get a free initial consultation with an attorney to find out what the laws are in your state.
Just FYI, my advice is based on personal experience collecting for Capital One through a third part collection agency.
That doesn't mean that's what has held up in court. There have been several cases where the creditor prevailed because of the Choice of Law provision. Of course, if you don't know about it, go to court and use it as a defense, then you'd never know what really applies.
Found this on the Capital One web page - latest credit card agreement: "The Law that Applies to Your Agreement. We make decisions to grant credit and issue you a Card from our offices in Virginia. This Agreement will be interpreted using Virginia law. Federal law will be used when it applies. You waive any applicable statute of limitations as the law allows. Otherwise, the applicable statute of limitations period for all provisions and purposes under this Agreement (including the right to collect debt) will be the longer period provided by Virginia or the jurisdiction where you live. If any part of this Agreement is found to be unenforceable, the remaining parts will remain in effect." So unless you can find an older agreement, or unless they try and sue and then provide an agreement that contradicts this, it looks like you're stuck with the SOL of Utah. In this agreement it states that the SOL will be the longer period provided by Virginia or the jurisdiction where you live.
My personal experience with Capital One is this... They will send to a collection agency eventually - Howard Lee Schiff seems to be a favorite and they are not kind. They will sue you - they sued us (we had 3 Cap One cards and one was only $500). If they do sue you, make sure to go to court. While Cap One would not settle with us prior to court, we told them it would cause us "undue hardship" if we were forced to pay. The rep from Cap One met with us in the hallway and offered a 20% settlement. Good luck!
