Capital One Car Settlement Offer

[amandag]

My sister has a car through Capital One that has been defaulted for quite a while. but lately she has been trying to work out a payment plan.  They haven't been very helpful, and most of their offers have been too much for her to pay.  Yesterday, they sent her an offer in the mail for a settlement of credit that was only 17% of the total she owes.  Is this too good to be true? Would she own the car/title? They even offered to let her pay it out over 6 months (which is still more than she can afford, but I offered to pay that for her).

I'm not sure I trust the offer, because it seems to good to be true.  Her credit score isn't really an issue, because it's in the tank anyway.  Getting this off her would help her to rebuild, but she does need the car to get to and from work, etc.  She doesn't have enough to buy a new one.

Thanks!

[RobertEG]

Does she currently have possession of the vehicle, or did they repossess it, and the negotiations relate to its return?

[amandag]

She does still have the car.  They have tried to reposses it, but she bounces around and around from address to address so they've never been able to find it.  The note says "We would like to offer you the opportunity to setle your account for 17.7% of your remaining balance"  The disclaimers say "Proceeds from insurance claims, refunds from AP cancellations, refunds from warranty cancellaions, refunds from credit life cancellations, and/or canvellations from other products may not be applied to payments made in acceptance of this settlement offer."

"If we cancel or forgive $600 or more on a debt, we will provide you a 1099-C tax form if required"

"We may cancel this offer if 1)You bring your acount current or pay your account in full 2) you file for bankruptcy protection, 3) required by law 4) your vehicle is deemed a total loss after sending this settlement offer."

It says nothing else about the vehicle.

[RobertEG]

Before comment, the final issue is whether or not the debt, apparently being one on a signed contract, is still within the SOL for your state.....?

[amandag]

I think so.  Written contracts are 5 years here.  She had the car before she went to jail in 2010, which is the orginal reason they couldn't find it and the reason she fell behind the payments.   She's been trying to get everything together, but they haven't really been willing to work with her, which is why I find this "too good to be true" offer a little suspect.

[amandag]

Honestly, it's a 2004 and I doubt it's even worth the $3,000 they want for it anymore.  Maybe they've just given up.  *I just looked up the bluebook, and it's only worth $7200 in excellent condition and hers is not in good condition, but still, its a huge chunk of debt she owes.

[Anonymous]

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@amandag wrote:

She does still have the car.  They have tried to reposses it, but she bounces around and around from address to address so they've never been able to find it.  The note says "We would like to offer you the opportunity to setle your account for 17.7% of your remaining balance"  The disclaimers say "Proceeds from insurance claims, refunds from AP cancellations, refunds from warranty cancellaions, refunds from credit life cancellations, and/or canvellations from other products may not be applied to payments made in acceptance of this settlement offer."

"If we cancel or forgive $600 or more on a debt, we will provide you a 1099-C tax form if required"

"We may cancel this offer if 1)You bring your acount current or pay your account in full 2) you file for bankruptcy protection, 3) required by law 4) your vehicle is deemed a total loss after sending this settlement offer."

It says nothing else about the vehicle.

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#4 clearly indicates to me that they expect to receive a saleable vehicle in the deal.

[amandag]

That's what was weird to me too, unless they just don't want her making money in the deal (ie: the car is totalled and her insurance company pays her $7,000 and she only gives them $3000), because it doesn't say anything else about the car.

[Anonymous]

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@amandag wrote:

That's what was weird to me too, unless they just don't want her making money in the deal (ie: the car is totalled and her insurance company pays her $7,000 and she only gives them $3000), because it doesn't say anything else about the car.

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Call and ask them straight up.

[lindsaydruart]

I just settled a Cap 1 car loan for 13% so yeah, it's probably legit. My car was repoed but the rep went through the policy of sending the title and such before I reminded him that I no longer had the car so 17% for them sounds legit to me. Tell her to call and pay. They'll mail the title in 2 weeks.

4. Means if you total the car, the deal is off because she can still default on the payment plan, which they will rescind. 

The verbiage in your letter is exactly what mine says. I paid the money and they are updating the CRAs right now. At the end of the payment plan or whenever you pay the settlement, you get the title and the CRA will reflect settled in full, not paid in full. The 1099-C is standard for debts over 500 bucks. It's a real deal.