topic Re: Capital One Settlement in Rebuilding Your Credit

Capital One Settlement

huntsmama — Wed, 13 Feb 2013 16:24:05 GMT

Hi everyone, this is my first post but I've been reading all of yours for about a year! Thanks for all the helpful info!

Here's my situation:

5 years ago, I lost my job, a week later I found out I was pregnant. When all was said and done I had 3 credit cards charged off and a repossession! It took a lot of work but I've rebuilt my score to a 668 (experian as of today) from a low of 490 about 2.5 years ago. Everything from way back when has been paid except this capital one account.

Original balance: $2,495

Current balance: $5,627

Charge off: 6/2008

Never sent to a collection agency.

Last year, I made a valiant effort to settle the debt for $2,400. They wanted $4,400.

Here's where it gets REALLY tricky. As far as they know, I live in VA, SOL is up and they actually sent me a 1099-C for the $2,495 as of 12/31/2012. I actually live in NY, so I'd really like to get this settled ASAP because then I will have it fall off this summer. I'd like to buy a house and this is the only thing holding me back.

I'd still like to settle for about $2,400-$2,500, I think it's fair and I know I owe that from when I incurred the actual charges.

I'm hoping you guys can give me some advice as to how to approach and negotiate this one. I know I should do all through mail but I don't want to open the can of worms that is my new address. They can send things to my old address, which they have, as I have family who lives there and is aware of the situation, but I don't want to risk them catching anything on my outgoing mail.

Any help is so very much appreciated!!!

Re: Capital One Settlement

Shogun — Wed, 13 Feb 2013 17:32:54 GMT

If a 1099C was issued, then there shouldn't be a debt.

Re: Capital One Settlement

Anonymous — Wed, 13 Feb 2013 17:41:02 GMT

Once a 1099-C is issued you have to include that has income for the year you received it. It is illegal of them to issue a 1099-C and attempt further collection activity.

Re: Capital One Settlement

huntsmama — Wed, 13 Feb 2013 18:03:09 GMT

They're still reporting the full balance. They aren't trying to collect and I did claim it on my taxes. I'd really like to get it taken care of so I can get it off...if it's best to just give it a couple more months and see if they adjust the balance then, I can do that, I'd just like to get it taken care of so I can get it taken off this summer.

Re: Capital One Settlement

Shogun — Wed, 13 Feb 2013 18:05:40 GMT

Send them a direct dispute and notify them that you have paid the taxes on this debt. They can't claim a loss and collect too, that's double dipping.

Re: Capital One Settlement

Anonymous — Wed, 13 Feb 2013 18:07:45 GMT

You reporting it as income is settling, in a sense. They got a tax cut and you paid for it by including it as income.

Re: Capital One Settlement

huntsmama — Wed, 13 Feb 2013 18:11:50 GMT

Works for me! That turned out to be EASY!

Thanks guys!

Re: Capital One Settlement

huntsmama — Wed, 13 Feb 2013 19:13:54 GMT

One more thing. They cancelled the debt for ONLY the principle, not the full amount including interest and fees. This can't come back to bite me in the behind by them demanding I pay the interest and fees, can it?

Re: Capital One Settlement

huntsmama — Fri, 15 Feb 2013 14:33:01 GMT

Can anyone tell me if they can still collect for the fees/interest if the yonly cancelled the principle?

Re: Capital One Settlement

Anonymous — Fri, 15 Feb 2013 14:49:28 GMT

@huntsmama wrote:
Can anyone tell me if they can still collect for the fees/interest if the yonly cancelled the principle?

I am going to go out on a limb and say they cannot. When they issued the 1099-C it has a place for interest and fees. They don't have to include those but can. In my opinion, if they forgave the principal, how can they attempt to collect fees and interest on a non-existent debt.

I have done tons of research, read the IRS literature and can't find a definitive answer.

You could always contact a tax attorney and ask them.

Re: Capital One Settlement

huntsmama — Sat, 16 Feb 2013 13:57:17 GMT

Me again! So I did a dispute through the three bureaus, so far Experian and Equifax have updated, nothing from transunion but here's the catch. They didn't update my balance! They removed all the charge off entries and have now changed it to Charge Off (July08) and then 120-30 days past due down a scale ending in November 08, then no reporting data for the rest of the time between then.

I'm guessing I need to go about this the old fashioned way and send copies of the 1099-C to the bureaus so they investigate the actual reason I'm requesting instead of some computer generated standard reasoning. I'm scared of going straight to the source and contacting Capital One...but if it's better to call them and say "What is going on" I will, but I'd rather wait till the TransUnion report is updated to do that.

Advice? (Again, I know, I'm annoying)

Re: Capital One Settlement

huntsmama — Mon, 18 Feb 2013 13:15:43 GMT

That was easy! I called them and they were very pleasant (shocking) I didn't even have to say why I was calling, they said that they had to issue an update through their system and then send an update to the credit bureau's! They said "We forgave this debt, so you no longer owe it" one of them said "That's an exciting thing!!!" hahahahaha thanks again for all the help everyone!

Re: Capital One Settlement

Jaguars28fan — Mon, 18 Feb 2013 13:29:29 GMT

I was just in the same situation as you. I actually got them to delete my account entirely. It took about 3 months, but I called several times. I talked to about 4-5 reps. A few told me I had to pay it and then I was going settle. They ended up telling me I don't have to pay, its only voluntary. Again, I kept calling and eventually someone told me they'd dispute it with the bureaus and they would remove it.

Re: Capital One Settlement

huntsmama — Mon, 18 Feb 2013 13:36:40 GMT

I saw your post yesterday about yours, I didn't even have to say why I was calling so it wasn't so much of a fight! It's going to fall off my report in June anyway so I'm not going to waste the energy on having them delete the whole line now. If they take it upon themselves to do so then WAHOOOOOO!!!!!

This is the first time I've been happy to pay the tax man!

Re: Capital One Settlement

Anonymous — Fri, 22 Feb 2013 18:13:39 GMT

what was y'all secret? I just spent over 30 minutes with them, talked to three different folks and got nowhere! And actually, the second rep was very rude, first one and last one was very nice but firm in their reporting of the debt.

Re: Capital One Settlement

huntsmama — Fri, 22 Feb 2013 18:26:42 GMT

I have no secret, I litterally called and just said "You sent me a 1099-C..." and she was like "WE FORGAVE THE DEBT! That's great!!!" I was super nice, so I don't know if that helped or if I just had good luck on the rep.

Re: Capital One Settlement

Anonymous — Fri, 22 Feb 2013 18:36:17 GMT

did you call the phone number on the 1099-c or their main account number?

Re: Capital One Settlement

huntsmama — Fri, 22 Feb 2013 18:44:11 GMT

Honestly, I'm not sure. I'd google and call any number you can find for their recovery department...and if one doesn't work use another