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  1. #1

    Default In Collections for a Debt That Was Paid Off From a Secured Card Deposit

    My question involves collection proceedings in the State of: New York.

    Years ago I got a secured Capital One Card to build my credit. I had to pay a $200 deposit for a $200 line of credit, they explain because I didn't have established credit I as a risk, so the $200 was for them to protect themselves in case I didn't pay, made sense to me. I never got a credit increase or anything, 18 months ago I was in between jobs and defaulted on this Capital One Card and thought the balance would be covered by the $200 secured deposit I had. Well I was wrong, last night this shows up on credit report from portfolio recovery, the collections account says it was opened May 23, 2017 for $244. I've heard nothing from Capital One, in fact I have another un secured card with them that was opened the month before they sold this debt to Portfolio Recovery.

    I disputed this on my credit report and I got a letter from Portfolio Recovery in the mailbox when I came home from work with a letter from capital one saying the debt has been sold to and owned by Portfolio Recovery along with a photocopy of my last years of bills from capital one before it defaulted.

    Am I really going to have to pay this debt twice? I already paid it in the form of my Security deposit.

    I am a big fan of the peoples court and the term "the law is supposed to make you whole." How is this making Capital One Whole? They were paid for the debt upfront, over the years I paid many interst charges and fees for this high interest secured card. Then they get money on top of what they were owed from Portfolio Recovery buying it, plus at least a $44 fee if they collect. I'm sure they didn't buy this at the $200 balance either, so they'll also make out like bandits. Instead of being made whole someone is going to be made doubly whole.

  2. #2
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    Default Re: Debt from Secured Card Bought, Have to Pay Debt Twice

    It's been quite some time since this collections account was created which also means that it's been longer since the last time you paid on that card. A long, long time. It also means that you most definitely did not build your credit.

    If you're concerned about the legitimacy of this debt have you called Capital One? Frankly, you should've done this some time ago. The interest and fees would have been explained in your contract as would terms revolving around default. You may be quite surprised to learn what you signed up for when you accepted a credit card when it comes to the contract. Let's just say that it's not always in your favor.

    As to your love of People's Court; it's TV.
    "Where do those stairs go?"
    "They go up!"

  3. #3
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    Default Re: Debt from Secured Card Bought, Have to Pay Debt Twice

    Do you have any proof that you paid the $200.00 security deposit? Have you contacted Capital One asking why the security deposit wasn't applied to the debt before it was sold?

  4. #4
    Join Date
    Sep 2010
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    Default Re: Debt from Secured Card Bought, Have to Pay Debt Twice

    You don't have to pay the debt twice. You'll get the $200 when you close the account. Until then, you owe for everything you charged without credit. You misunderstood the point of the credit. It was not there for a cushion for you to dip into, it was there as an incentive for you not to default.

  5. #5
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    Nov 2013
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    Default Re: Debt from Secured Card Bought, Have to Pay Debt Twice

    I would think the account would be closed by Capital One once the debt is sold. The way you state it, the deposit was a cost of the CC. I don't think so.

    From Capital One:

    Your security deposit is refundable. Though, because it is held as collateral against your credit line, it will be refunded if you close your account and pay your balance in full.

  6. #6
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    Default Re: Debt from Secured Card Bought, Have to Pay Debt Twice

    Given that this is a credit card, late fees and interest add up quickly. The fact that you default does not immediately cause the credit card company to close your account, and if they did many months after you missed your first payment the balance could easily be $244 even after the application of the deposit. If you received statements from your credit card after you stopped paying, your answer may be there; if not, look into getting copies.

  7. #7

    Default Re: Debt from Secured Card Bought, Have to Pay Debt Twice

    Quote Quoting Mr. Knowitall
    View Post
    Given that this is a credit card, late fees and interest add up quickly. The fact that you default does not immediately cause the credit card company to close your account, and if they did many months after you missed your first payment the balance could easily be $244 even after the application of the deposit. If you received statements from your credit card after you stopped paying, your answer may be there; if not, look into getting copies.
    I looked at the last few bills Portfolio Recovery sent, the card wasn't maxed out at the $200 balance a majority of the $244 was penalties and fees.

  8. #8
    Join Date
    Mar 2013
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    Default Re: Debt from Secured Card Bought, Have to Pay Debt Twice

    Read your cardholder contract.

    You got it wrong by walking away from the account without properly closing it and now you owe.

  9. #9
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    Default Re: Debt from Secured Card Bought, Have to Pay Debt Twice

    Quote Quoting wingman
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    I looked at the last few bills Portfolio Recovery sent, the card wasn't maxed out at the $200 balance a majority of the $244 was penalties and fees.
    Then it could be that you are being billed for your credit card, but the $200 is sitting in an account somewhere.

    We can't investigate your bank records for you. Find out what happened to the $200 from the bank where that money was held. If it is still in the account, see if you can use it to pay down the credit card to $44, or ask how you can get it refunded.

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