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I Used the Services of Debt Reduction Law Center But Capital One Wants More Money. – Lon

“Dear Steve,

In early 2004 I lost my job. Although I was able to find some part time work, this situation resulted in a significant loss of income and our accounts became past due. After a few months we started receiving many calls regarding late payments on past due accounts. Most of the calls came from Capital one. They started out only once or twice a week and soon increased to multiple times each day.

I decided to get legal assistance with my credit problems and obtained services from attorney Emilio Francisco in Irvine California. This service was with his company “Debt Reduction Law Center, 17771 Fitch, Irvine, CA 92614”. My agreement of them was for a fixed amount of $841.37 for 30 months and they would negotiate “settlement” amounts and pay our creditors. The “retainer fees” for this service as “$3,365.49”. The retainer fees were to be paid with the 1st four monthly payments. After that our creditors would start receiving funds. They would take care of the telephone calls and other collection activity.

In spring of 2005, my wife was informed that her teaching position would be terminated due to school district budget reductions. Also around that time we again started receiving collection activity both by telephone and mail. Around this time I started receiving collection activity again and contacted “Debt Reduction Law Center”. They had paid nothing out. I was frustrated and started pursuing my options to get out of their “contract”.

I immediately called every one of our creditors and attempted to get our account problems resolved. I took care of the accounts that were in my wife’s name first and then my own.

The first account taken care of was Karin’s Capital One Account# 5291 1517 9214 3131. The balance on the account at the time (06/05) was $2429.74 and the settlement amount offered was $1457.84. The amount was paid in full with either a “electronic check” or “wire transfer”.

I received no further correspondence from Capital One. I did receive a collection letter 05/15/06 (almost a year later) from a “Freidman & Wexler, L.L.C. (Attorney) regarding a balance of $4,663.18. I replied immediately with a letter stating that the account was “settled” and to contact me if they needed additional information. I never heard anything from them again.

In November 2009 (over 4 years later), I received another collection letter from a “Wyse Financial Services” asking for payment of a balance of $7700.69! I replied immediately with a letter stating that the account was “settled” and to contact me if they needed additional information. I never heard anything from them again.

On 09/10/10 I received a “statement” from Capital One with a balance of $8444. 58! This was the ONLY correspondence I ever received from Capital One since I settled the account with them in June 2005.

I could use some advice as to how to deal with this problem.

Since 09/11/10, I have sent two letters to Capital One stating that we do not owe that amount.

I filed a dispute with TransUnion electronically (and have received a electronic receipt of that dispute).

I decided to file Paper disputes instead and yesterday (09/15) filed a dispute with Transunion, Equifax and Experian.

Lon”

Dear Lon,

When the Debt Reduction Law Center settled your debt they should have provided you with a letter from the creditor saying the debt was settled in full. Without that letter there is no proof that the balance you did not pay is not collectible.

This would not be the first time I’ve heard of this happening. Typically what happens is the creditor will say we never had such an agreement and will sell the residual outstanding balance or attempt to collect it latter.

Hunt down the settlement letter you go when you first settled the debt and provide it to Capital one. That will take care of it as long as the settlement letter says the partial payment is accepted as payment in full.

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.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.




About the author

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.

6 Comments

  • Lon, in your comments you say this: “I immediately called every one of our creditors and attempted to get our account problems resolved. I took care of the accounts that were in my wife’s name first and then my own.

    The first account taken care of was Karin’s Capital One Account# 5291 1517 9214 3131. The balance on the account at the time (06/05) was $2429.74 and the settlement amount offered was $1457.84. The amount was paid in full with either a “electronic check” or “wire transfer”. “

    Which means that YOU settled this account with Capital One? Not the settlement company, is this true?

    If You settled it then you should have the document that states that your payment would be marked as Paid in Full, one of the tricks the card companies do is try and get you to send them money BEFORE they give up that agreement.

    I would search for that agreement and provide it Capital One, if you can’t find the letter you should try to have them Validate the Debt for you.

    Good Luck.

    -Dave

  • Lon, in your comments you say this: “I immediately called every one of our creditors and attempted to get our account problems resolved. I took care of the accounts that were in my wife’s name first and then my own.

    The first account taken care of was Karin’s Capital One Account# 5291 1517 9214 3131. The balance on the account at the time (06/05) was $2429.74 and the settlement amount offered was $1457.84. The amount was paid in full with either a “electronic check” or “wire transfer”. ”

    Which means that YOU settled this account with Capital One? Not the settlement company, is this true?

    If You settled it then you should have the document that states that your payment would be marked as Paid in Full, one of the tricks the card companies do is try and get you to send them money BEFORE they give up that agreement.

    I would search for that agreement and provide it Capital One, if you can’t find the letter you should try to have them Validate the Debt for you.

    Good Luck.

    -Dave

  • Lon,

    Without an agreement in writing from the creditor accepting a partial payment as a payment in full they may come back after you. Without a written agreement in your hand they will say there never was an agreement and just claim you made a big partial payment.

    I understand you felt everything was ok but it sounds like non of those communications explicitly agreed or accepted your payment as a full settlement.

    If you feel you have a legal basis to prove they accepted the electronic payment as payment in full, contact a local attorney immediately to pursue this and contact the bank for you.

    Steve

  • “Debt Reduction Law Center” is not who settled this debt. As mentioned previously, when I started noticing problems with them:

    I immediately called every one of our creditors and attempted to get our account problems resolved. I took care of the accounts that were in my wife’s name first and then my own.

    “The first account taken care of was Karin’s Capital One Account# 5291 1517 9214 3131. The balance on the account at the time (06/05) was $2429.74 and the settlement amount offered was $1457.84. The amount was paid in full with either a “electronic check” or “wire transfer”.

    I received no further correspondence from Capital One. I did receive a collection letter 05/15/06 (almost a year later) from a “Freidman & Wexler, L.L.C. (Attorney) regarding a balance of $4,663.18. I replied immediately with a letter stating that the account was “settled” and to contact me if they needed additional information. I never heard anything from them again.

    I may or may not have received letters from any of these people. Most of the Capital one settlements were directly with Capital one, however this one (the first one) might have been with a collection firm.

    My only indication that everything was ok was that:
    1.
    For five years I never received ANY correspondence or calls from Capital one.

    2.
    I received a single letter one year after the settlement from a collection firm, answered it and never heard anything for three more years.

    3.
    I received another letter four years after the settlement from another collection firm, answered it and never heard anything for another year.

    Then (FIVE YEARS LATER) I receive a NORMAL STATEMENT from Capital One for $8700.00!

  • “Debt Reduction Law Center” is not who settled this debt. As mentioned previously, when I started noticing problems with them:I immediately called every one of our creditors and attempted to get our account problems resolved. I took care of the accounts that were in my wife’s name first and then my own.”The first account taken care of was Karin’s Capital One Account# [redacted] 3131. The balance on the account at the time (06/05) was $2429.74 and the settlement amount offered was $1457.84. The amount was paid in full with either a “electronic check” or “wire transfer”.I received no further correspondence from Capital One. I did receive a collection letter 05/15/06 (almost a year later) from a “Freidman & Wexler, L.L.C. (Attorney) regarding a balance of $4,663.18. I replied immediately with a letter stating that the account was “settled” and to contact me if they needed additional information. I never heard anything from them again.I may or may not have received letters from any of these people. Most of the Capital one settlements were directly with Capital one, however this one (the first one) might have been with a collection firm. My only indication that everything was ok was that:1.For five years I never received ANY correspondence or calls from Capital one.2.I received a single letter one year after the settlement from a collection firm, answered it and never heard anything for three more years.3. I received another letter four years after the settlement from another collection firm, answered it and never heard anything for another year.Then (FIVE YEARS LATER) I receive a NORMAL STATEMENT from Capital One for $8700.00!

    • Lon,

      Without an agreement in writing from the creditor accepting a partial payment as a payment in full they may come back after you. Without a written agreement in your hand they will say there never was an agreement and just claim you made a big partial payment.

      I understand you felt everything was ok but it sounds like non of those communications explicitly agreed or accepted your payment as a full settlement.

      If you feel you have a legal basis to prove they accepted the electronic payment as payment in full, contact a local attorney immediately to pursue this and contact the bank for you.

      Steve

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