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josephina

Judgement from CapOne - Should I settle?

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Two and a half years ago CapOne took me to court on an unpaid credit card and the judge ruled in their favor. The comment on the judgement doc says "No current ability to pay -- cont. generally." I think that's why they've ceased bothering me since then.


But last week I received a letter from the law office, the one that took me to court, saying "In the interest of resolving this debt with our client, we have been authorized to offer you a settlement of 50% of the balance due, if received at our office by xxxxx . " The Current Balance Due is $850, so $425.


What's my best course of action? I have the resources to settle and am trying to increase my score so I can buy a house, like so many others on this board. I'd appreciate any advice !!


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I'd take it the settlement. If you want to buy a house a mortgage company is going to want all collections paid.

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50% of what ?

 

did they actually quote a figure?

 

2 years of interest and attorney fees could be higher than that?

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The subject area indicates "Current Balance Due: $850.xx" and the letter says the settlement is 50% of the balance due. The $850 ties to what I see on my credit reports. The Judgement has a total of $720 and says interest will continue to accrue at 12%. The Current Balance Due also includes Costs Awarded by Court of $50 which I believe is the Small Claims Court filing fee. I would make sure that we were talking about the same number before paying. I'm planning to get a mortgage from a special first time program which requires a score of 680. I talked to one of the lenders and he assured me that I would not have to pay off past-dues, I'd just need to write a letter of explanation. So, besides the possibility that a lender might require that I pay the past-dues (if I use a different program/lender, or if this broker was not telling me everything I need to know), are there other reasons I should settle?

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that'd be a special mortgage plan that wouldn't care about you paying 450 dollars...

i would be surprised if they would really let that through, if you can't pay 450 dollars for a past due, how can you pay a mortgage i would think is the response. I could be wrong... but i did a USDA loan and had to have everything paid, even a 40 dollar fee that was collecting...

 

regardless, they are offering you 50 %, nothing wrong with seeing if they would take less;

or, since it's in your boat now, take the 50% but only in agreement for a pay for delete... that's the option i would take if you can work it.

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Good ideas, thanks! I've heard that CapOne will never do a PFD, but no harm in asking. I've also heard they won't settle, but yet I have the offer in hand. Is calling them to negotiate via phone OK? (I'm a newbie to this credit repair business ..... ). The letter also states "THIS IS A COMMUNICATION FROM A DEBT COLLECTOR. THIS IS AN ATTEMPT TO COLLECT A DEBT/CLAIM. ANY INFORMATION OBTAINED SHALL BE USED FOR THAT PURPOSE."

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I'd make sure the law firm is really the one authorized to represent Cap 1 before I offer to pay a dime. There's a lot of sketchy CAs out there that are known to collect on debts they have no right to.

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IF it's a legit offer from the firm representing Cap One, I would accept it in a heartbeat.

 

I had a judgment from Cap One in 2007 for a little over $1600. By the time I decided to pay it last year, with the fees and interest it was around $2800 or so. That law firm only offered around a 10% discount, and I had no choice but to pay it as we were thinking of getting a mortgage at the time.

 

Also, depending on the state you are in, you should check to see if the judgment can be vacated upon satisfaction. I know here in Illinois, the law firm did all the paperwork for me and it disappeared from the credit reports quickly.

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IF it's a legit offer from the firm representing Cap One, I would accept it in a heartbeat.

 

I had a judgment from Cap One in 2007 for a little over $1600. By the time I decided to pay it last year, with the fees and interest it was around $2800 or so. That law firm only offered around a 10% discount, and I had no choice but to pay it as we were thinking of getting a mortgage at the time.

 

Also, depending on the state you are in, you should check to see if the judgment can be vacated upon satisfaction. I know here in Illinois, the law firm did all the paperwork for me and it disappeared from the credit reports quickly.

 

It's from the lawfirm who filed suit, one would assume that they are legit.

 

pay it off and be done with it. - it may show up on your reports as " Settled for less than the full amount" if you go with the 50%

 

if you have the resources to PIF, I would do that. - you may get a higher credit score and a lower interest rate on your mortgage.

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IF it's a legit offer from the firm representing Cap One, I would accept it in a heartbeat.

 

I had a judgment from Cap One in 2007 for a little over $1600. By the time I decided to pay it last year, with the fees and interest it was around $2800 or so. That law firm only offered around a 10% discount, and I had no choice but to pay it as we were thinking of getting a mortgage at the time.

 

Also, depending on the state you are in, you should check to see if the judgment can be vacated upon satisfaction. I know here in Illinois, the law firm did all the paperwork for me and it disappeared from the credit reports quickly.

 

It's from the lawfirm who filed suit, one would assume that they are legit.

 

pay it off and be done with it. - it may show up on your reports as " Settled for less than the full amount" if you go with the 50%

 

if you have the resources to PIF, I would do that. - you may get a higher credit score and a lower interest rate on your mortgage.

 

 

Not necessarily - law firms have been known to sue for debts they have no right to collect. I'd double check with Capital One that these people are legit before you accept any offer and that they didn't sell the debt to some other third party.

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The judgement is not showing on my credit reports. It just looks like a regular negative item. I only know of the judgement because I was there, and because I went to the court the other day and picked up a copy. I would rather not remind the law firm that there is in fact a judgement, because that might give them the impetus to report it to the CRA's as such, or make them feel that their position is stronger? In other words I think I should let sleeping dogs lie as far as the judgement goes.

 

I am getting ready to call the law firm but hesitate because I've heard so many times "never talk to a debt collector." Any advice on that ?

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IF it's a legit offer from the firm representing Cap One, I would accept it in a heartbeat.

 

I had a judgment from Cap One in 2007 for a little over $1600. By the time I decided to pay it last year, with the fees and interest it was around $2800 or so. That law firm only offered around a 10% discount, and I had no choice but to pay it as we were thinking of getting a mortgage at the time.

 

Also, depending on the state you are in, you should check to see if the judgment can be vacated upon satisfaction. I know here in Illinois, the law firm did all the paperwork for me and it disappeared from the credit reports quickly.

 

It's from the lawfirm who filed suit, one would assume that they are legit.

 

pay it off and be done with it. - it may show up on your reports as " Settled for less than the full amount" if you go with the 50%

 

if you have the resources to PIF, I would do that. - you may get a higher credit score and a lower interest rate on your mortgage.

 

 

Not necessarily - law firms have been known to sue for debts they have no right to collect. I'd double check with Capital One that these people are legit before you accept any offer and that they didn't sell the debt to some other third party.

 

 

 

Sorry, but I think you're not providing accurate advice

 

this is not a collection agency, she wasn't sued by a CA/JDB.

 

The Plaintiff was Capital one, OP has copies of the judgment, the firm that is contacting OP were attorneys for Capital One on the original lawsuit;

 

OP has copies of the judgment.

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Thanks for clarifying that, Sasprilla. Yes the Plaintiff was "Capital One Bank USA, N.A." and the lawfirm, Howard Lee Schiff, P.C. that sent the recent letter was the one that represented CapOne in court. The letter heading includes: "Re: Capital One Bank USA, N.A." The letter body begins "In the interest of resolving this debt with our client, we have been authorized to offer you a settlement ....." (It does not specify who their client is, so as Lilyflower suggested I should probably check with CapOne to make sure.) Assuming that CapOne is in fact Schiff's client, is it OK to pay Schiff rather than trying to pay CapOne directly?

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I settled with Capital One on 2 cards a couple years ago. They weren't judgement, just charge-offs. When I was ready to pay I called Capital One and they gave me the contact information for who had been assigned to these accounts. Capital One would not take payment directly, I tried.

 

I reached a settlement agreement on both (2 different agencies assigned to them). After I paid they sent me a letter a few days later stating the account had been satisfied. I waited a couple weeks and called Capital One and they confirmed they had received the payments.

 

It reports as settled for less than the full amount.

 

So, I'd probably call capital one first and confirm that these people are authorized to collect on their behalf.

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Keep in mind they will file a 1099-C with the IRS and you'll receive a copy in January, you'll owe tax on the gifted $425. That being said, if you're getting a mortgage soon I would definitely settle for less, pay the tax on it, and deal with an updated tradeline and/or judgement.

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If Capital One is offering 50% of a judgment, I'd jump on that. Capital One is one of the worst when it comes to trying to settle after a judgment. Judgment pretty much never go away, it drops off your credit report after 7 years but they can usually collect for ever. You might one day find all your money gone from your checking account, that's one of their favorite ways to collect on judgments. If they do send you a 1099-c, you can file form 982 with the irs and either reduce the taxes and get rid off them all together.

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The letter says that there will be a 1099 only if the forgiven amount is $600 or more. "Whenever $600 or more is forgiven as a result of settling a debt for less than the balance owed the creditor may be required to report the amount forgiven to the IRS on a form 1099c, a copy of which would be mailed to you by the creditor."

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Thanks for clarifying that, Sasprilla. Yes the Plaintiff was "Capital One Bank USA, N.A." and the lawfirm, Howard Lee Schiff, P.C. that sent the recent letter was the one that represented CapOne in court. The letter heading includes: "Re: Capital One Bank USA, N.A." The letter body begins "In the interest of resolving this debt with our client, we have been authorized to offer you a settlement ....." (It does not specify who their client is, so as Lilyflower suggested I should probably check with CapOne to make sure.) Assuming that CapOne is in fact Schiff's client, is it OK to pay Schiff rather than trying to pay CapOne directly?

 

i wouldn't quibble about it - the letter heading states it all. cap one probably won't accept payment directly,

 

but Crap one is known for not accepting settlements and attempting to collection on balances even if there was a formal settlement;

 

you should get any settlement agreement in Writing from Schiff, ask them to send the full terms and conditions regarding any settlement

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Another interesting aspect is that generally I've heard that CapOne will not settle, however, in this case they came to me with a settlement offer. What's odd is the timing of their offer, which I received shortly after initiating a Jack Attack on this line with the CB's. Maybe it's a coincidence, but seems like it could be a result of seeing my Jack activity. Their systems would have to be automated because the timing was so close (e.g. CB receives letter, immediately asks CapOne for info, CapOne immediately notifies the attorney who via automated system sends out settlement proposal). Anyhow I thought this might be of interest if anyone has the same circumstances and would like to settle with CapOne, they could give it a try.

 

Also, by the way, I finally received my LexisNexis reports and there's no mention of the judgement.

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Last month I settled this $800 account for 50%. Per Myfico, the data reported to Equifax. Equifax up 20 !!! (I feel like I'm following the S&P 500.) By the way that's a real FICO. Strangely the account now indicates that the outstanding balance is $400. It should say $0. I will look into that in due time.

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If Capital One is offering 50% of a judgment, I'd jump on that. Capital One is one of the worst when it comes to trying to settle after a judgment. Judgment pretty much never go away, it drops off your credit report after 7 years but they can usually collect for ever. You might one day find all your money gone from your checking account, that's one of their favorite ways to collect on judgments. If they do send you a 1099-c, you can file form 982 with the irs and either reduce the taxes and get rid off them all together.

 

Heh...that kind of thing happened to me many years ago when I lived in VA. I lost my job and had my car repo'd back in 1989, and the bank got a judgment for the deficiency. Their law firm chased me for a while, then seemingly gave up. I didn't hear anything from them for many years, so I stopped worrying about them.

 

Fast forward to 2000...it had been over a decade since the repo, and I had pretty much forgotten about them, but they hadn't forgotten about me! One day I went to look at my checking account online, and BAM...they had slapped a garnishment for over $10K on my account out of the blue. Yes, folks, the interest keeps accruing. Fortunately for me, those were the dot.com days, and I was making some serious coin at the time. I called the law firm, and they agreed to lift the garnishment if I would pay off the judgement. I was in their office the next day. They let me pay it off $1000 a month until it was paid in full, with the warning that if I missed a payment, the garnishment would be immediately reinstated. With my income at the time, it was easy to pay them the $1000 a month, and I even paid it off a couple of months early just to get them off my back.

 

Stuff like this is why it's important to avoid a judgment if at all possible. They can come after you for up to 20 years or even more. They can just lie in wait, and blindside you with a huge garnishment when you least expect it. If you have the chance to settle, and you can afford to pay it off, DO IT! You can't put a price on peace of mind. :good:

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