Jump to Navigation

Capital One illegally sues customers after bankruptcy

When a consumer realizes they can no longer make their credit card payments, one of the wisest things they can do is file for bankruptcy before the debt gets completely out of hand. By nipping debt in the bud, a consumer can file for bankruptcy and emerge with a new understanding of their personal finances and a clean slate. Although bankruptcy leaves a mark on a credit rating, that mark goes away with time.

Some consumers, however, are learning that debt does not always disappear with bankruptcy as it should. One woman filed for Chapter 7 bankruptcy because she could no longer make minimum payments on a $15,000 debt to Capital One Financial. Her minimum payments had jumped from $300 to $750 each month and she could no longer handle that amount. Even after bankruptcy, Capital One sent her a notice saying that they were suing her for $15,000.

Capital One Financial is the 10th-largest bank in the United States, but does not outsource debt collection. Instead, Capital One employees are tasked with collections, but little is done to keep track of bankruptcy filings. It is illegal to sue someone for debts that have been discharged through bankruptcy, and many former customers are fighting back by suing the bank.

Another 35-year-old woman was sued by Capital One for her $4,266 debt that had been discharged. She, in turn, sued the band for ignoring the law. Capital One dropped the suit and asked the judge to throw out the former client's counter-suit. The judge refused.

In 2011, a court-appointed auditor determined that Capital One had pursued 15,500 "erroneous claims" of debts that had been discharged through bankruptcy. Capital One agreed to reimburse approximately 130 borrowers without admitting to any wrongdoing.

The irony is not lost to some, who point out that Capital One was saved from bankruptcy in 2008. It received a $3.55 billion bailout in the "Capital Purchase Program" that was funded by taxpayers.

Source: Tulsa World, "Capital One sues customers illegally," Phil Mulkins, Jan. 8, 2012

No Comments

Leave a comment
Comment Information
Start Right Now

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Visit Our Bankruptcy Law Website Subscribe to This Blog's Feed
Office Locations

1115 Massachusetts Ave NW,
Washington, DC 20005
Phone: 202-559-1428

10512 Pohick Court,
Fairfax Station, VA 22039
Phone: 703-550-7030

6926 Seven Locks Road,
Cabin John, MD 20818
Phone: 301-890-4500

Toll-Free: 877-441-4076
Fax: 202-638-5858

Twitter link