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Capital One Charge Off

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Capital One Charge Off

My sis has a credit card from Capital One that's about to charge off in ten days. She can't afford to bring it current enough to prevent charge off. My question is what happens once it charges off? Will she be able to make some sort of monthly payment arrangement to pay it off with Capital One or will they sell it right away to collections? The amount is $2,500. She's called to try to make arrangments but they won't help her out, other than telling her she has to pay the "minimum due" to bring it current. 
10 REPLIES 10
New Member

Re: Capital One Chargeoff

She has to pay it somehow. They chargeoff will destroy her credit and even if she wants to make payments after chargeoff the negative mark will stay for 7 years. Good luck

Message 1 of 11
Community Leader
Mega Contributor

Re: Capital One Charge Off

She should be able to make payment arrangements even if charge of happens.
I would not mess with Cap One too long if account is eventually CO.
Cap One loves litigation
Message 3 of 11
Established Contributor

Re: Capital One Charge Off

@MichaelMyers,

Tell your sister if she can pay the minimum due from the initial month it became late it will stretch out the charge-off for another month. She should be able to keep doing this until she can get the funds. But she can’t be short by even a $1 or a day or it get CO’d. She’ll be on the edge of CO each month but if she’s making those minimums is should help to stretch it out for a bit. Tell her to make sure she’s getting the exact amount due off her statements.

I was in the same boat a few years ago and did what I’m advising and was able to stretch it out 3 mos til I was able to catch up.

Good luck








Message 4 of 11
Regular Contributor

Re: Capital One Charge Off

Most likely talking to the wrong department. Tell her to call and say she is interested in their Financial Hardship program. Many credit cars companies will close the account, freeze the balance from accruing interest and will split payments over 24-48 months.

A collection is worse than a charge off when it comes to credit. I still had ‘decent’ credit with a 3 year old charge off on my credit. When I got a collection it dropped it by 80 or so pts.

   
Credit Repair Tracker: Don't get discouraged: 180pts gained to 740!


MYFICO Proud Garden Club Member: 

Message 5 of 11
Super Contributor

Re: Capital One Charge Off


@Boisvert wrote:
Most likely talking to the wrong department. Tell her to call and say she is interested in their Financial Hardship program. Many credit cars companies will close the account, freeze the balance from accruing interest and will split payments over 24-48 months.

A collection is worse than a charge off when it comes to credit. I still had ‘decent’ credit with a 3 year old charge off on my credit. When I got a collection it dropped it by 80 or so pts.

Please post accurate information fellow poster. A charged-off account that has a past-due balance is worse than a charged-off account that has been paid or settled. Meanwhile, the balance associated with a collection account is not considered in FICO's scoring models. That's why paying off a collection doesn't actually result in a higher credit score. There's no util considered in a collection unlike a CO account. Your CO was aged whereas your collection was fresh and it hit you hard for being new.





My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC at 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game. Pay it Forward!
Message 6 of 11
Community Leader
Mega Contributor

Re: Capital One Charge Off

If that card is "10 days from being charged off", it's already over 5 payments late and restricted

I'm not sure where you got the 10 day part, because charge off is just an accounting measure
It's the worst delinquency that leads to that status.
If she's missed 5 payments or more, even if she brought it current, card would remain restricted, and quite possibly closed.
While this card may be a lost cause, she may wish to apply for future cap one accounts, so bringing it current, and continuing paying from there may help her avoid the naughty list in the future.
If she cannot do that, she needs to reach out to them again and see what kind of payment arrangements they are willing to do.
Anything is better than just letting it go and seeing what happens.

Message 7 of 11
Regular Contributor

Re: Capital One Charge Off


@FireMedic1 wrote:

@Boisvert wrote:
Most likely talking to the wrong department. Tell her to call and say she is interested in their Financial Hardship program. Many credit cars companies will close the account, freeze the balance from accruing interest and will split payments over 24-48 months.

A collection is worse than a charge off when it comes to credit. I still had ‘decent’ credit with a 3 year old charge off on my credit. When I got a collection it dropped it by 80 or so pts.

Please post accurate information fellow poster. A charged-off account that has a past-due balance is worse than a charged-off account that has been paid or settled. Meanwhile, the balance associated with a collection account is not considered in FICO's scoring models. That's why paying off a collection doesn't actually result in a higher credit score. There's no util considered in a collection unlike a CO account. Your CO was aged whereas your collection was fresh and it hit you hard for being new.


I'm encouraging the OP not to allow this to go to collections as it`ll do even further damage. 

   
Credit Repair Tracker: Don't get discouraged: 180pts gained to 740!


MYFICO Proud Garden Club Member: 

Message 8 of 11
Super Contributor

Re: Capital One Charge Off


@Boisvert wrote:

@FireMedic1 wrote:

@Boisvert wrote:
Most likely talking to the wrong department. Tell her to call and say she is interested in their Financial Hardship program. Many credit cars companies will close the account, freeze the balance from accruing interest and will split payments over 24-48 months.

A collection is worse than a charge off when it comes to credit. I still had ‘decent’ credit with a 3 year old charge off on my credit. When I got a collection it dropped it by 80 or so pts.

Please post accurate information fellow poster. A charged-off account that has a past-due balance is worse than a charged-off account that has been paid or settled. Meanwhile, the balance associated with a collection account is not considered in FICO's scoring models. That's why paying off a collection doesn't actually result in a higher credit score. There's no util considered in a collection unlike a CO account. Your CO was aged whereas your collection was fresh and it hit you hard for being new.


I'm encouraging the OP not to allow this to go to collections as it`ll do even further damage. 


The account hasn't even made it to charge off yet. Nor any talk about collections. As Remmy said. Its already doing damage now. We try to give accurate information. If we dont know something. We can ping someone that will know. Your statement in red was not accurate. We dont want to lead new posters or any posters into a wrong direction/decision. Credit is a serious matter. I only pointed this out as a learning curve for your future posting on the forum. I can ping @Remedios and she can tell you how its done here. I'm not getting on you. You learned something new now that you didnt know before. Run with it and help others.





My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC at 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game. Pay it Forward!
Message 9 of 11
Community Leader
Mega Contributor

Re: Capital One Charge Off

A collection related to CO is a separate item on CR. 

 

It will report with the date collection account was open, hence making delinquency "appear" more recent. That wont affect the removal date, which is based on DOFD, but it will cause additional score drop. 

Collection amount may not match the amount on CO, as there might be fees and interest accumulating. That's one of the most common reasons people believe dispute is in order when it isnt. 

 

There is no "better" or "worse". Collection account is just adding extra salt to the wound. 

The only scoring "reward" for paying a CO or collection is that updates stop and "time since last negative" extends. 

 

 

In this particular case scenario, the sister needs to make all past due payments, plus current payment and any amount over the limit if fees and interest have pushed past it. 

A lot of times, creditors will not make payment arrangements while card is still technically open (though not usable) because the payment arrangements have already been broken. 

When we accept the terms, we agree to pay. 

 

The account wont be "sold" to external collection agency right away. If they do that, they lose percentage of any future payment, but their attempts at collecting will be more aggressive than they are right now. 

 

She should make every effort to bring it to current, then close to preserve terms and allow to negotiate a payment plan. 

The only reason this card is still "open" is because people are more likely to pay while it is, so let that work to her advantage. The damage is already done, now it's just damage control. 

Things can get a lot worse for her. 

If she needs to borrow money to make these 5-6 minimum payments, it's a lot better option than wage garnishment or bank account levy. 

 

I sincerely hope she can get it figured out rather quickly 

 

 

 

 

 

 

 

 

 

 

Message 10 of 11
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