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Capital One is the worst credit card issuer

Mon Aug 9, 2010 02:08PM

And I am not taking about their customer service, which is not worse than that of others. I am talking about their willingness or rather unwillingness to settle debt with consumers. After we published Debt settlement with Capital One and Bank of America story that described how successfully a couple I know manage to settle credit card debt, we have received many emails which basically state that Capital One settlement is very hard to negotiate and that they simply refuse to settle for anything less than 50% of the outstanding debt amount. Sometimes, they do not want to negotiate at all, even after a 120-day default. According to many readers, where Chase, Bank of America, Wells Fargo and few others would often settle for less than 30%, Capital One charges bad debt off and then sends it down to its Recovery Department. It also files lawsuits more frequently than the rest.

Well, as I said before the couple that settled for so little, is very persuasive. May be they were just lucky, may be they exaggerated somewhat or a lot. Who knows. The fact is if the Capital One is the worst credit card issuer among the others that you are trying to settle with, negotiate your debt with others and then try to settle with Capital One. Do not let it hold you up. Apparently, Capital One also does not sell its default debts to the third party collection agencies so you can keep on trying to settle with them.

Wells Fargo debt settlement? Get it in writing

Mon Aug 9, 2010 10:08AM

Q: I owe close to $43,000 in credit card debt to Wells Fargo, give or take. I have not worked for 3 months and may be going back to school. Wells Fargo just offered a debt settlement plan which I find hard to resist but also believe. It will give me up 84 months with 0%. The monthly payment of $531 would amount to $44,604 to include $1,500 settlement fee. My minimum payment now is $930 at 14% interest. I have not missed the payment yet, but wrote them a hardship letter detailing my situation and then called. The family would give me the interest free loan so I can afford the payments. This credit card debt settlement sounds too good. Could it be Wells Fargo is simply trying to see if I would take the deal and then turn around and say - OK, now that we see you can afford the payments, we are going back to the original agreement?

A: Was this verbal offer made via the phone or at your Wells Fargo branch? Do you have the letter with such a debt settlement offer? If you do have it in writing, take it. If not call them and request this offer be sent in writing. Once you receive it, read it carefully and make sure you understand all the terms. Look closely at the small print and every condition they often put on the very bottom. Only if you have it in writing, the Wells Fargo can not renege or claim that you misunderstood. Make sure that once the 84 months are over, the debt is paid in full.

Utah statute of limitations on credit card debt

Thu Aug 5, 2010 12:08AM

Q: What is the statute of limitations in Utah for credit card debt lawsuits? Is that a written contract or a promissory note type? Which stature I should look at? I owe $2,000 in credit card debt for quite some time and have a feeling, the statute of limitations is about to expire.

A: To my best judgement, credit card debt in the state of Utah falls under Open Account type allowing 4 years for the creditors to act. Note that Utah law explicitly states that a written acknowledgement signed by the debtor revives the statute of limitations.

Bankruptcy after divorce, can they come after my ex assets?

Mon Aug 2, 2010 05:08PM

For those of you who want to split and bear no hard feelings towards each other, it is an important question. This is quite a complicated issue and if you think you can get away filing for bankruptcy after divorce, you may be right. On the other side, you may be wrong and the creditors will come after your spouse assets with guns blazing.

One of my wife girlfriends divorced last November. In late September, basically 6 weeks prior to the divorce, she and he would be ex split their assets and did it rather amicably. Not that they had much of assets to start with, but both were working and seemingly stable financially. Never was a word about bankruptcy and such. Just two nice persons not suited for each other, whatever that means. Regardless ...

Full Article

Ex husband is filing for bankruptcy and the cosigner on auto loan

Sat Jul 31, 2010 01:07AM

Q: 4 years ago my ex cosigned for my Nissan truck. That is a 60-month loan. We divorced 2.5 years ago now he is filing for Chapter 7. He told me the creditor would certainly come after my truck since as a cosigner he co-owns it. I will be trying to take him off the title very shortly. Still, can they come after my truck?

A: The creditors will certainly come as long as either of loan signatories misses a few payments or filing for bankruptcy. If you wish to keep your Nissan truck, try to sign a reaffirmation agreement. Or contact the lender to see if you can refinance the truck and get his name off the loan and title.

Credit card debt relief in Illinois

Tue Jul 27, 2010 11:07PM

Q: I am going back to school and moving in with my parents. I am also selling my condo in downtown Chicago to pay off credit card debt and live on. I owe around $25,000 to various credit card issuers and to my relief, settled for $11,000 altogether. So the question is, if a credit card issuer finds out that I have money after the sale, can it come after the full amount that I owe? I am worried about Amalgamated Bank of Chicago since it is the one that also holds the mortgage.

A: As long as you have everything in writing, all credit card debt relief agreements with every credit card issuer / bank, you should be fine. The thing to remember is that you will more than likely get the IRS hit because the Internal Revenue Code treats forgiveness of debt as taxable income. You may have to pay tax on $14,000 amount that is being forgiven. You will get 1099 C form, Cancellation of Debt from every credit card that forgives a debt of $600 or more. Such a relief.

Negotiated credit card debt reduction, but is asked for more

Mon Jul 26, 2010 02:07PM

Q: I managed successfully or so I thought, to negotiate a credit card debt reduction with Capital One, down to $1,800 from $7,000. That was almost a year ago. Yesterday, I received the letter from Capital One collection department stating that I owe almost $6,300 in debt - the $5,200 that was supposed to be forgiven plus interest and fees. Can the credit card companies come back like that and ask for more money after the agreed-upon debt reduction? What are my options? I am going to school and work in Target making $8.50 in hour, and fear of potential judgement.

A: That is something you may want to discuss with the lawyer who is licenced in your state. Do not just jump among credit/debt forums and such. Theoretically though, if you have a written agreement, and I assume you do, with Capital One on described debt reduction, you should be just fine politely telling them to go elsewhere. I never heard of credit card issuer coming after someone after they settle debt. Once credit card issuer agrees to accept a smaller amount than the one you owe for the full satisfaction of the debt, it cannot come back after you for a deficiency. Still if you are worried, then talk to a lawyer.

If you negotiated that debt reduction and have nothing to prove it with, then your situation is much worse. Try to renegotiate the new amount and get everything in writing. If Capital One refuses, run, do not go to the lawyer. Either get the lawyer do some negotiating for you or consider filing for bankruptcy.

Mortgage modification - 2% interest rate 30 year fixed

Mon Jul 26, 2010 09:07AM

One of my acquaintances just got his mortgage modified. Through some non profit organisation, somewhere in Chicago south side church, he managed to squeeze a 30 year fixed home loan, 2% interest rate for life. Some mortgage modification, considering that he had 5.5% 3-year adjustable loan before. His payment now is under $1,200 a month. That is on $320,000 home loan.

The dude has been unemployed for almost 6 months and this mortgage modification plan only allows no more than 30% or so for principal and interest mortgage payment. So they took his wife monthly income and may be his unemployment, and come up with the dollar amount they should not exceed. Hence the 2% interest rate.

So what is the big deal? This fella used to sell hard core subprime home loans for at least 4 years pulling close to $200,000 a year in commissions. He would have 3 or 4 closings a month, with $5,000 to $6,000 per deal on average. Now he is broke, with his wife supporting him literally. He could not even get a personal banker job in a local bank, because it required Series 6 Financial Examination which he failed. So call this mortgage modification a Poetic Justice Reversed, but he, who used to push 9% or 10% interest rates to unqualified borrowers, is sitting nicely on 2% interest rate which will last for the life of the loan.

Credit score change for the worse

Wed Jul 14, 2010 12:07PM

Just a slight one, but still a change. My credit score decreased by 20 points, from 866 to 846, likely because of the HELOC sitting very close to maxed out for a few months. Can think of nothing else. That extremely high utilization rate of almost 98% was compensated by otherwise very solid credit history. Interesting thing was that I received probably 6 or 7 credit card offers in May and June. Each of such offers certainly carried a soft inquiry against my credit report, but as you well aware of, soft inquiry does no harm. Read about inquiries, and credit report myths for further clarification.

I applied for all of them and received 4 new credit cards while 2 issuers denied my requests. That makes 6 fresh hard inquiries within 3 weeks. We shall see what my credit score change will be in September. See previously written Bad credit score estimator and Increase credit score 100 points.

Credit card delinquencies fall

Fri Jul 9, 2010 10:07PM

Despite very high unemployment and plummeting home values, credit card delinquencies fell to an 8-year low in the first quarter of 2010, that is according to the American Bankers Association. And for the first time since 2002, the number of credit card accounts that were past due by 30 days or more, were less than 4% of the total number of bank accounts.

ABA Chief Economist James Chessen suggests this is happening because consumers are doing a much better job managing their finances, spending and borrowing less. We think that the real reason behind the nice numbers is the mere fact that the number of strategic defaulters has increased to the point it became really noticeable. Such defaulters choose stop paying their mortgages while they still can afford paying as well as property taxes and/or association fees, yet manage to live in their homes for free for months and often years, since banks are so overwhelmed with the shear quantity of foreclosures and short sales, they simply have no man power to process all such cases and evict people from homes with delinquent mortgages. So these homeowners now have a ton of money that often goes on paying credit card bills.

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