Jump to content

Cap 1 Installment Plan after Charge-Off


jimmyconway
 Share

The last post in this topic was posted 1199 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Recommended Posts

My Capital One credit card was charged off in April 2019. The last payment that I made on this account was in October 2018. The balance on the charge-off is just a little over $33,000.

 

Capital One offered me an installment plan to pay towards this account. I set up an 84 month installment agreement for $15 per month, total payment $1,260. The first payment is set to begin on October20 and then each 20th of the month thereafter. Capital One told me that after the installment plan is finished, they will then agree to another payment plan or settlement, or final payment, etc.

 

Capital One told me that with this particular installment arrangement, they will not pursue future collection activity so long as I'm making the payments according to the agreed terms.

 

 

 

1) What will happen to my credit report pertaining this account? Will the negative marks come off 7 years from the initially late payment date of October 2018?

 

2) I understand that by making payments, the statute of limitations for a lawsuit restarts from the date of last payment. I'm not trying to run away from this obligation. I'm simply trying to buy some time and get back on my feet and then try to settle if possible. I'm more focused on the future credit reporting.

 

3) I don't have a substantial amount of money now to be in a settlement negotiation. As a result, I thought that by getting in this installment agreement, I could comply by making payments until I can get back on my feet at a later date and settle this up. Am I doing the right thing by getting into an installment agreement with Capital One regarding this charged-off account?

 

Thank you.

Link to comment
Share on other sites


Get that paid off as quickly as possible...makes no sense to pay such a nominal amount for seven years. 

 

For those that come along later, CrapOne is actually one of the few that will do a Rule5000 re-aging even though their phone staff don't know that the Agreement is consistent with the FDIC Rules on re-aging.  The key there is to be in contact with them BEFORE an account charges off...they usually allow 90 days to get the account current, after which it is returned to an open and useable status AND the derogs are removed from the reporting.  It is a win-win for all involved. 

 

Back to the OP's situation, one is almost ALWAYS better off dealing with an OC as opposed to some third-party entity.  And kudos for stepping up to the plate to do the right thing...

Link to comment
Share on other sites

22 hours ago, centex said:

Get that paid off as quickly as possible...makes no sense to pay such a nominal amount for seven years. 

 

For those that come along later, CrapOne is actually one of the few that will do a Rule5000 re-aging even though their phone staff don't know that the Agreement is consistent with the FDIC Rules on re-aging.  The key there is to be in contact with them BEFORE an account charges off...they usually allow 90 days to get the account current, after which it is returned to an open and useable status AND the derogs are removed from the reporting.  It is a win-win for all involved. 

 

Back to the OP's situation, one is almost ALWAYS better off dealing with an OC as opposed to some third-party entity.  And kudos for stepping up to the plate to do the right thing...

Thank you centex. When you are referring to re-aging, what are you referring to? 1) The statute of limitations for filing suit, or 2) re-again on the credit reports.

 

Thank you again.

Link to comment
Share on other sites

56 minutes ago, jimmyconway said:

Thank you centex. When you are referring to re-aging, what are you referring to? 1) The statute of limitations for filing suit, or 2) re-again on the credit reports.

 

Thank you again.

 

< Trusting that centex doesn't mind if I intercede with a reply ... >

 

Rule 5000 is an FDIC policy that permits a creditor to "re-age" the past due balance on a revolving account, at the creditor's discretion, such that the account is re-classified as "current".  The account resets so that only the current minimum payment is now due.

 

Note:  As centex alludes, a charged off account is no longer eligible for this treatment.

 

An account is eligible for such re-aging after 3 consecutive monthly payments are made in an amount that would satisfy the current minimum payment due (excluding any past due amounts) and the borrower has demonstrated a renewed willingness and ability to repay the loan.  (Again, actual "re-aging" is at the discretion of the creditor and isn't mandatory.)

 

 

Hat tip to centex for noting this.  I wasn't aware that Cap 1 extended this option to cardholders, nor that Cap 1 goes the extra mile in clearing related past delinquency entries to one's credit report (this is an atypical step when a creditor applies Rule 5000 to an account).

Link to comment
Share on other sites

As long as you are making payments, the SOL is tolled. It will not expire like it would if you hadn't made any further payments after default. I agree with the others, 1200 over 7 years is a waste of money. It won't even cover the interest. Even at the nominal judicial rate in the 8-10% range, the interest on 33K is going to be about 3K per year, and you're only going to pay less than 200? Makes no sense. That 33K figure will more than double in 7 years.

Link to comment
Share on other sites

On 10/11/2019 at 7:57 AM, jimmyconway said:

Thank you centex. When you are referring to re-aging, what are you referring to? 1) The statute of limitations for filing suit, or 2) re-again on the credit reports.

 

Thank you again.

As noted in the thread, it is essentially a stepping back in time to before the default.  As it if never happened.  Thus SOL becomes a moot point.  Obviously, if you later defaulted for a second time and never got it current, then it DOES change the timelines, but the goal of the FDIC Rule is to help the consumer who is getting their fiscal house in some semblance of order while mitigating risks of default for the bank...

 

It requires the equivalent of three months of payments but nothing precludes the consumer from making a lump sum.  CrapOne and MBNA were the two historically noted for doing this, but I don't know if the MBNA influence carried over to BofA in this regard after their merger some years back. 

 

It is a very consumer-friendly move that also helps the bank. 

Link to comment
Share on other sites

On 10/11/2019 at 10:02 AM, hdporter said:

 

< Trusting that centex doesn't mind if I intercede with a reply ... >

 

Rule 5000 is an FDIC policy that permits a creditor to "re-age" the past due balance on a revolving account, at the creditor's discretion, such that the account is re-classified as "current".  The account resets so that only the current minimum payment is now due.

 

Note:  As centex alludes, a charged off account is no longer eligible for this treatment.

 

An account is eligible for such re-aging after 3 consecutive monthly payments are made in an amount that would satisfy the current minimum payment due (excluding any past due amounts) and the borrower has demonstrated a renewed willingness and ability to repay the loan.  (Again, actual "re-aging" is at the discretion of the creditor and isn't mandatory.)

 

 

Hat tip to centex for noting this.  I wasn't aware that Cap 1 extended this option to cardholders, nor that Cap 1 goes the extra mile in clearing related past delinquency entries to one's credit report (this is an atypical step when a creditor applies Rule 5000 to an account).

Thank you for your response here. I'm not worried about statute of limitations on filing suit as I have intentions to pay and settle this account in the future. Capital One offered the 7-year installment plan INTEREST FREE at $15 per month.

 

My question pertains to the charged-off account of $33,000. Can Capital One re-age the charged-off account from the date of the first payment that is due of $15? Or, will the delinquency status of the account clear up 7 years after October 2018, since that was the first date of delinquency on this account? Additionally, Capital One advised me that there is no particular due on this installment plan. They simply told me that you pay when you can but by making an informal commitment of $15 per month for 84 months, we'll leave you alone and allow you to make payments as  you wish, provided that you make the payments as scheduled, even though there is no actual due date per se.

Link to comment
Share on other sites

On 10/12/2019 at 7:01 AM, legaleagle2012 said:

As long as you are making payments, the SOL is tolled. It will not expire like it would if you hadn't made any further payments after default. I agree with the others, 1200 over 7 years is a waste of money. It won't even cover the interest. Even at the nominal judicial rate in the 8-10% range, the interest on 33K is going to be about 3K per year, and you're only going to pay less than 200? Makes no sense. That 33K figure will more than double in 7 years.

They are not charging interest on this. It is 0% interest. I'm just buying some time until I can get back on my feet and then either pay them or settle with them.

Link to comment
Share on other sites

OP, what you are dealing with is NOT a Rule 5000, so there is not a removal of derogs that would be expected to occur.  As to the potential re-set of time as it relates to litigation will depend entirely on your State law and the specific language in your Agreement with CrapOne. 

 

Reporting limitations remain the reporting limitations...seven years from the charge-off event is the longest that the charge-off should report.  Whether they update to show the current payments remains to be seen. 

Link to comment
Share on other sites

20 hours ago, jimmyconway said:

Thank you for your response here. I'm not worried about statute of limitations on filing suit as I have intentions to pay and settle this account in the future. Capital One offered the 7-year installment plan INTEREST FREE at $15 per month.

 

My question pertains to the charged-off account of $33,000. Can Capital One re-age the charged-off account from the date of the first payment that is due of $15? Or, will the delinquency status of the account clear up 7 years after October 2018, since that was the first date of delinquency on this account? Additionally, Capital One advised me that there is no particular due on this installment plan. They simply told me that you pay when you can but by making an informal commitment of $15 per month for 84 months, we'll leave you alone and allow you to make payments as  you wish, provided that you make the payments as scheduled, even though there is no actual due date per se.

Ok, so centex's separate reply is spot on.

 

The discussion re Rule 5000 was tangential to your query here.  It's noteworthy that Capital One actively applies the Rule and worthwhile to refresh related details.  However, it's not pertinent to your account since the Rule isn't applicable to accounts post write-off.  (In hindsight, the discussion might best have been posted to it's own thread.)

 

So, from what you've laid out, this proposed "informal commitment" has no bearing on the credit reporting of this account (except, to the extent that you pay down the balance through payments under that commitment, the reported balance will update).  The account will report as a "charge off" for 7 years from the date of first delinquency, and then the negative status will be removed (and, most likely, the entire tradeline, even if there's a balance outstanding at that time).

 

The "informal commitment" has only one impact:  Capital One is agreeing to withhold collection activity so long as you continue making periodic payments.

 

My take is that payments under the commitment are favorable to you so long as they're eligible to seek a judgment.  Since, short of a new collection account activity, the current reporting is as negative as it's going to get, I'd largely proceed as you suggest:  Make payments that you can afford, to forestall such collection activity. 

 

When you're more firmly situated financially, I'd suggest first asking if they would settle the remaining balance at a reduced amount.  If they're agreeable to that, I'd follow by asking if they might be able to delete the account from your credit report if you were able to successfully stretch for full repayment.

Link to comment
Share on other sites

13 hours ago, centex said:

OP, what you are dealing with is NOT a Rule 5000, so there is not a removal of derogs that would be expected to occur.  As to the potential re-set of time as it relates to litigation will depend entirely on your State law and the specific language in your Agreement with CrapOne. 

 

Reporting limitations remain the reporting limitations...seven years from the charge-off event is the longest that the charge-off should report.  Whether they update to show the current payments remains to be seen. 

Thank you very much centex. Thank you for clarifying this.

Link to comment
Share on other sites

7 hours ago, hdporter said:

Ok, so centex's separate reply is spot on.

 

The discussion re Rule 5000 was tangential to your query here.  It's noteworthy that Capital One actively applies the Rule and worthwhile to refresh related details.  However, it's not pertinent to your account since the Rule isn't applicable to accounts post write-off.  (In hindsight, the discussion might best have been posted to it's own thread.)

 

So, from what you've laid out, this proposed "informal commitment" has no bearing on the credit reporting of this account (except, to the extent that you pay down the balance through payments under that commitment, the reported balance will update).  The account will report as a "charge off" for 7 years from the date of first delinquency, and then the negative status will be removed (and, most likely, the entire tradeline, even if there's a balance outstanding at that time).

 

The "informal commitment" has only one impact:  Capital One is agreeing to withhold collection activity so long as you continue making periodic payments.

 

My take is that payments under the commitment are favorable to you so long as they're eligible to seek a judgment.  Since, short of a new collection account activity, the current reporting is as negative as it's going to get, I'd largely proceed as you suggest:  Make payments that you can afford, to forestall such collection activity. 

 

When you're more firmly situated financially, I'd suggest first asking if they would settle the remaining balance at a reduced amount.  If they're agreeable to that, I'd follow by asking if they might be able to delete the account from your credit report if you were able to successfully stretch for full repayment.

Hdporter: Thank you for the clarity here. Yes, everything you explained is the why I thought it would be but I wanted some verification from experts like you, centex, et al. I'll be making a payment soon. I'll keep you guys posted on the updated credit reporting, if any.

Link to comment
Share on other sites

The last post in this topic was posted 1199 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share




  • Member Statistics

    • Total Members
      185276
    • Most Online
      2046

    Newest Member
    Nolo
    Joined
×
×
  • Create New...

Important Information

Guidelines