Capital One Summons...should I settle?

[Anonymous]

Hello!

My husband has a $2000.00 capital One charge off from Feb of 2003.  He received a summons from capital one.  I called the lawyer for Capital One, and she said the settlement amount would be $1,700 ish.  I believe the SOL is 6 years (we are having a lawyer check into this).  We can make this lump settlement, but I was wondering, how this would look on his credit report, and would this have an additional impact on his credit?

[Anonymous]

Would look much better than a judgment, that's for sure,  a judgment is going to tank your scores let alone leaving your bank accounts and pay and other assests vunerable to seizure.   If it's within the SOL, take the settlement, the amount you owe after the Judgment is going to increase dramatically.  You'll have to pay court cost, attorney fee's on top of the continued interest and over the limit fee's.

Message Edited by Boswd on 11-27-2007 01:19 PM

[Ausfarm]

I would think you could negotiate that in your settlement.  That is, you agree to pay in full and they agree, among other things, not to report to the CRAs.  If you settle, then there'll be no judgment to worry about creeping onto you credit reports.  The suit will be what is called nonsuited in the clerks records. 

I don't know what you're state is, but seven years is pretty long for a SOL.  In many states it's 4 years.  Search the forums for "SOL."  I believe there's a thread that links you to a website which lists the SOL for each state.

[Anonymous]

Okay.  Would it be better to Pay in full or to settle then?

[Anonymous]

Depends.   Is having a paid instead of a settled worth the $300.?    If you settle you won't have to worry about a 1099 I think and if you did it would be nothing really.   $300 is $300 but I can definitly see why you would want a paid in full.  Overall I like it better too

[Ausfarm]

You said your attorney was looking in to the SOL.  If the SOL has passed, then you're attorney will likely file an answer and/or a motion to dismiss the case based on the expiration of the SOL. 

IF, the SOL hasn't run, then your attorney can arrange the settlement for you.  If you don't want to pay an attorney to settle on your behalf and you're comfortable doing it,  I imagine you can send an appropriately edited PFD letter to Cap1 legal department.  If they say yes, then you're set. 

Message Edited by Ausfarm on 11-27-2007 01:57 PM

Message Edited by Ausfarm on 11-27-2007 01:58 PM

[Anonymous]

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crazineko wrote:

My husband has a $2000.00 capital One charge off from Feb of 2003.  He received a summons from capital one.

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When was your husband served?

Did the summons state how soon he needs to respond?

Have you heard back from your lawyer on the SOL?

[Anonymous]

More than likely he SOL has not yet passed because Cap is infamous for getting judgement just beore the SOL expires. How much is you lawyer costing for this?  I would add up all the costs bfore making a decision.  Settled will report assuchbut it will reflect a 0 bal.  No worse than PIF'ing. It isstill a collection.  However a judgement is another thing.

[Anonymous]

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Boswd wrote:

Depends.   Is having a paid instead of a settled worth the $300.?    If you settle you won't have to worry about a 1099 I think and if you did it would be nothing really.   $300 is $300 but I can definitly see why you would want a paid in full.  Overall I like it better too

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Creditors are required to file a 1099 if they write off more than $600 of your debt.  It's considered taxable income for the debtor (you) because it's a "forgiveness of debt."  This means you *may* be liable to pay income tax on the amount forgiven, although my understanding is that this does not happen often.

[Anonymous]

masdeocho wrote:

Creditors are required to file a 1099 if they write off more than $600 of your debt.  It's considered taxable income for the debtor (you) because it's a "forgiveness of debt."  This means you *may* be liable to pay income tax on the amount forgiven, although my understanding is that this does not happen often.

You are right about the $600 limit, but I don't believe they have any leeway. IRS can be rather, ah, insistent.

In 2004, I settled one and they 1099ed me.