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I Owe Capital One $55,000 And Have Not Paid in 8 Months. – Dawn

“Dear Steve,

I owe $5,500 to Capital one. I have not paid in 8 months and it went to collection. They said they are going to sue me. I dont have the money to pay on this for another few months. What do I do?

Hi, I am 24 and I have a credit card with Capital one which I have not paid on for 8 months now. I just dont have the extra money to pay on the card. I have been barely keeping my head above water with the bills I already have.

Today I received a call from a Collection agency. They were yelling at me and telling me I was young and don’t know what I am doing. They told me that Cap one is going to sue me for the $5500 I owe. They also started calling my family members and leaving messages on their home phones. They even went as far as to ask for my Father.

I dont even live with my parents. I told the collection agency that they can not call my family and they told me that they are going to keep calling in order to get in touch with me. She kept yelling at me and saying what are you going to do about this. I couldn’t even get a word in so I hung up. I read that you should never admit to a debt to a collector so I just told them that I would call capital one. They continued to tell me that I cant call cap one because they dont want to talk to me and they wont take my calls. Which i know cant be true.

I am actually really scared right now because I dont want to get sued and I dont know what to do. I am going into a debt management program and it starts in January. Now i am afraid that cap one wont accept the program. What should I do and what are my next steps. I can use all the advice I can get.

Thanks so much!

Dawn”

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The Answer

 

Dawn,

My bet is Capital One charged off your debt and sold it to the collection agency. The tactics you describe would not be authorized by Capital One but would be the type of pressure tactic used by a bad debt buyer.

Since you are barely keeping your head above water with the bills you currently have, I really don’t think a debt management program is going to be enough to solve this problem for you. It sure sounds like the last thing you need is another payment for this Cap One debt on top of debts you can barely make.

I honestly don’t see a logical exit from this without bankruptcy. You should click here to find a local bankruptcy attorney you like. Make an appointment to go in and see the attorney and discuss your situation.

Bankruptcy will give you protection from the collection company, terminate your debts, and give you a fresh start.

Big Hug!

I Owe Capital One $55,000 And Have Not Paid in 8 Months.   Dawn
Get Out of Debt Guy – Twitter, G+, Facebook

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

I Owe Capital One $55,000 And Have Not Paid in 8 Months.   Dawn
Get Out of Debt Guy – Twitter, G+, Facebook

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Tom

    Hi Steve,
    Thanks for your comment. I certainly respect the value of your opinion and your depth of experience on this subject! However, I still don’t agree that Dawn should file for bankruptcy yet. It certainly would be prudent for her to get the required pre-BK counseling now and get a consultation with a BK attorney, so she’s prepared to file on short notice. As I said in my comment, I totally agree with you that most debt management programs are a waste of time and money and usually fall to deliver on their promised benefits. While her creditor may very well sue for $5,500, it’s unlikely. It wouldn’t hurt for her to mention to the creditor that she’s strongly considering a Chapter 7 filing. This will often discourage a creditor from bringing legal action because they will be out additional unrecoverable legal fees and costs. If the outfit calling her is a collection agent and not the original creditor, CapitalOne, per FDCPA she has a right to send a cease and desist letter demanding they stop calling. If they continue, they can be sued. Finally as you certainly know, bankruptcy is certainly not a pleasant experience. If it can be avoided, by all means do so. It’s possible she is a judgment proof debtor, and most BK attorneys would advise against filing. Although filing a petition in bankruptcy might seem to be the answer to her debt problems, there are some instances where bankruptcy is not a good solution. One of those instances is being “judgment proof.” If Dawn is judgment proof, creditors can do virtually nothing legally to obtain money or property from her.

    Regards,

    Tom

    • Tom

      As a clarification to this string of comments, although the headline says “$55,000″, the debt is only $5,500, a huge difference!

  • Tom

    Steve and Dawn,

    Frankly I think it’s a bit premature to be thinking of bankruptcy for this small sized debt. Write the collection agency a “cease and desist” letter, and report their number to the National DoNotCall Registry. You haven’t been sued yet and it’s unlikely they will sue for this amount. If they do, then you can get a free consultation with a local bankruptcy attorney. I agree with Steve about Debt Management program. In general, based on surveys done by impartial government entities and consumer protection agencies, they very rarely offer good results, and generally do nothing you can’t do yourself.

    • http://GetOutOfDebt.org Steve Rhode

      Tom,

      Just to help enlighten the logic behind my initial consideration of bankruptcy in this situation. I was concerned that Dawn was struggling through enough other issues, like just making it month-to-month. She is upset that the collectors are calling family members and leaving messages on their phones, which they have a right to do to search for Dawn. She does not appear to be in for a fight over this and is scared by the process and a debt management program is very unlikely to be effective in her situation. As far as the amount of the debt and being sued, I’ve seen many, many cases of people being sued by the bank for a lot less.

      I know the amount of the debt seems low to consider a bankruptcy in most situation but bankruptcy here would stop all calls to family and neighbors, prevent any suit and resolve this debt so she can move forward. It seems to be the only legal solution to address all her concerns. I am a firm believer in taking a proactive action to resolving the underlying issue when possible and not just hiding from it and worrying if it will resurface again and again latter.

      Steve

  • Heather

    Declaring bankruptcy for $5500 seems a little extreme. How about getting a 2nd job and start paying the debt back?

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