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Capital One Default – Should You Pay? 2022

capital one default

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

Have you defaulted on your Capital One account? We discuss what can happen with a Capital One default, including if they will sell on your debt and if you will eventually have to pay. Read our guide before it’s too late! 

What is Capital One?

Capital One Financial Corporation, more commonly known as Capital One, is an American financial company that specialises in bank accounts, loans and credit cards. In the UK, they are a popular credit card company, offering a range of credit card products. 

What happens if you owe Capital One?

If you miss a credit card payment to Capital One they will write to you or get in touch in another way. They will ask you to make the payment immediately or call them to discuss any financial difficulty stopping you from paying. 

Their website states that they are open to personalised payment plans to help you pay off your credit card arrears in an affordable way. So it’s worth getting in touch with Capital One even if you know you can’t make the payment. 

But if you don’t get in touch, Capital One will send you more letters and apply more fees for the missed payment(s). Your account could then eventually be closed and recorded as a default.

What is a Captial One default?

A Capital One default can refer to a missed payment or when Capital One closes your account because you have failed to pay off the debt. A default is a serious situation and shouldn’t be taken lightly.

Capital one default and your credit score

When you default on your credit card, Capital One will record the activity on your credit file for six years, which will reduce your credit score. When you apply for further credit, such as loans, credit cards and mortgage, the lender will be able to see the default and could deny you credit. 

Does Capital One sell debt?

Capital One states that they will take action to recover any unpaid credit card bills and charges, which may involve selling the debt to a debt purchasing company. This is usually a debt collection business which will buy the debt way below its actual value. 

So, if you end up paying the debt off when owned by the debt collection company, they’ll make a considerable profit. They can sometimes buy debts way below their actual value because there is a risk that they won’t get paid at all. 

In the past, Capital One has been known to sell debts to Robinson Way, which is a trading style of a debt collection business called Hoist Finance. For example: 

“Looking for advice….I was on a payment plan with C1 for £25 per month towards a credit card debt of about £1700. […] I received a letter from ROBINSON WAY & CO last Thursday advising me that they were taking over my loan and I should make all payments to them.”

  • Forumite (Money Saving Expert Forum)

If you receive letters from either of these companies about a Capital One debt, they’re likely not to be a scam. But the debt could have been sold to other debt purchasing companies.

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Getting chased for Capital One debt

Once the Capital One debt has been sold to a debt purchasing company, they will contact you to make a payment or ask you to commit to a payment plan if needed. They’re likely to threaten court action if you don’t cooperate. This is known as a Letter Before Action because it gives you an opportunity to pay before potentially being taken to court. 

Sometimes legal threats can be used as a scare tactic to get you to pay, but when the company has already purchased your debt it’s less likely to be an empty threat – but not always! Unfortunately, there’s no way of being sure that the legal threat is real or just a scare tactic.

Should you pay your Captial One debt?

You should aim to clear your Capital One debt, but only commit to a payment plan that won’t cause further financial pressure or cause other debts to arise elsewhere. 

By ignoring the debt collection company, you run the risk of being taken to court. If you lose in court, you’ll be legally obligated to pay, and if you don’t, you could face bailiffs or have money taken from your wages. 

If you think there has been a mistake, you should instead ask the debt collection company to prove you owe the debt. They must provide a copy of the signed credit card agreement from Capital One. if they cannot do this you don’t have to pay. And you can tell a judge that they didn’t prove the debt if taken to court. 

When you DON’T have to pay Capital One

There is a time when you might not have to pay Capital One or the debt purchasing company. Some debts become too old to be taken to court to prevent a backlog. If your Capital One debt is at least six years old and you haven’t made a payment within the last six years, it could qualify.

Read more about statute barred debts to see if you are off the hook!

Beating Debt Collectors

There are several ways to deal with debt collectors and improve your finances.

Choosing the right way to tackle your debt could save you time and money, but the wrong one could cause even more harm.

It’s always best to find out about all your options from a professional before you take action.

Fill out the 5 step form to get started.

Will Capital One take a settlement?

Capital One might agree on a settlement figure for your arrears. The only way to know for sure is to ask. But if they have already sold your debt to a debt purchasing company, you’ll need to try and settle with them. The company may or may not agree to settle, depending on how much you offer. 

Will Capital One remove a default?

Capital One may remove the Capital One default from your credit file if you pay the debt or settle the debt with them (or the debt purchasing company). Otherwise, the default will be automatically removed from your credit report after six years. 

Free Capital One default help

For more help with a Capital One default, consider speaking with a UK debt charity, Citizens Advice or read more about debt solutions on our debt helper page.

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