Want to ask before acting!

[Anonymous]

Hi I'm new to the forum and have a question. When I was in college, I opened a Capital One account with the agreement that my father would pay the bill. Well, he didn't and not realizing the consequences, nor did I. Now I want to fix my credit and this is the only delinquent account that I have. However, I am not sure what steps I should take.

My FICO score is now 611. I owe 1502 to Capital One, most of it in interest. The account was opened in January 2002 and the last payment was May 2003. The account has been charged off and the account closed by the creditor. The current status is "bad debt/collections."

My question is would the best step be to pay it off? wait for the account to expire? something else? If you recommend a best course of action, what are the steps involved?

Thanks!

[Anonymous]

What state are you in? I ask because that will determine SOL, in 99+% of cases, and Cap 1 has a nasty habit of suing within 6 months of SOL expiration.

[Anonymous]

When the account was opened I lived in South Carolina, but now I live in Virginia.

[Anonymous]

SC SOL is 3 years on everything.

http://www.scstatehouse.net/CODE/t15c003.htm

VA SOL is trickier.

http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+8.01-246

3 years for open and oral accounts, 5 for written, 6 for promissory, and there are plenty of others. Open is normally what's used for CC, but not always.

You should be out from under the SOL, but let me do a little research.

[Anonymous]

If I am pass the SOL, then would it be better to pay off this debt or wait for it to expire while building credit using a secured credit card?

[Anonymous]

As with all things, it depends.

First, the SOL again. Bankrate also says 3 years for CCs.

http://www.bankrate.com/brm/news/cc/20040116b2.asp?caret=8

However, they list WA as 3 years and KY as 6 years. There are differing opinions, apparently in caselaw, in both states. The AG won't clarify it because the courts have ruled in different directions.

Did find someone on CIC who said VA judges have ruled 5 years for CC SOL.

Assuming you are out from under the SOL, to wait it out would depend. Do you have paper or online copies of your CRs showing something to effect of "schedule to appear until <month> <year>"? If so, what are they showing?

Since the account was opened in '02, DOLP in '03, the DOFD has to be between those. This means it drops from your reports in either 2009 or 2010. If you aren't planning to buy a home before then, you could wait it out.

Minimally, you could wait out a 5 year SOL in 2008. I would try to contact the state AG's office and ask them about CC SOL and whether there's any caselaw on the subject. They might say no, talk to a lawyer, but you might be able to coax something outta them.

http://www.oag.state.va.us/index.html

Next step, try an naca.net lawyer, and you might luck out and get a free phone consult. Worked for me.

Finally, if all else fails, use the VSB to 30 minutes with a lawyer for no more than $35.

http://www.oag.state.va.us/FAQs/FAQ_Legal_Assist.html

Since you were in SC, and they have a solid 3 year SOL, it's possible you slipped by Cap 1 and they haven't realized you're in VA now.