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CAP 1 charged off my auto loan while making payments

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I had an accident earlier this year, car was totaled, insurance paid capital one, and there was a portion I still owed ($4K) to Cap 1 on the loan due to being upside down. I called Cap 1, made payment arrangements, made my payments on auto pay.

 

I went to apply for a car loan a couple weeks ago and bank said I had a charge off from Cap 1.. I logged in an see the account has a zero balance, and asking to contact them. I am about to call them, but my score just dropped significantly.

 

Any suggestions on how to remedy this? I can just pay it off, but there was no warning from them that it would be charged off if I went with the “making payments” option.

 

Thoughts?

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The BEST you could hope for is to get an agreement from them (in writing) to delete in exchange for the lump sum that is owed.  Their Agreement with you was to finance a vehicle.  The collateral ceased to exist and they had no obligation to convert the note to an unsecured personal loan. 

 

How much time elapsed between the accident and when you entered into the 'agreement' with CrapOne?  Were ALL payments made each month on time following the accident? 

 

What do you have in WRITING from them related to the Agreement after their collateral ceased to exist in the manner that they had financed? 

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"EDIT" I didn't see how I could edit.... I called them at lunch... Here is the UPDATE:

 

  • They write it off after 180 days
  • They report it as a "charge off".
  • When I pay if off it changes the reporting to "Paid in full - charge off"
  • I didn't get anything in writting that it wouldn't be written off / reported as a write off in Feb when we arranged the payment terms. TL;DNR:  I told them my bank was paying them $40K, and I needed to see if I could make arrangements for the balance, $4K. They said OK, here's your payments... It was set on auto pay, as my other car loan ($20K) with them.

 

So, at this point, my credit union last week gave me an 11% for a 2018 used car loan...b/c of this..  What are your thoughts if I pay it off (no issue to do so) and the report as "Paid in full - charge off"? Is it worth to pay it off? My Fico was ? I don't know but close or over 700... Today while I was on Cap 1 to figure this out they report it 580... I have NO other credit issues..

 

Thoughts? 

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1 hour ago, centex said:

The BEST you could hope for is to get an agreement from them (in writing) to delete in exchange for the lump sum that is owed.  Their Agreement with you was to finance a vehicle.  The collateral ceased to exist and they had no obligation to convert the note to an unsecured personal loan. 

 

How much time elapsed between the accident and when you entered into the 'agreement' with CrapOne?  Were ALL payments made each month on time following the accident? 

 

What do you have in WRITING from them related to the Agreement after their collateral ceased to exist in the manner that they had financed? 

 

Time elapsed? I continued making my regular car payments until I got confirmation from Cap 1 that they received a check from the insurance. I called them, asked them if I could make a payment... (details below on my other post).. basically, they agreed on a payment plan... but today's call they said they only gave me 180 days... of course I asked if they can send me that email / letter and they said it would've been verbal.

 

All payments were made.. I had it on auto pay.

 

Nothing in writing... see Paragraph 1 :( ..

 

 

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