I have an old credit card account from capitol 1 and it had a $200 credit limit.?

Question

I maxed it out after I had it for two months and then I stopped paying for it. Now here we are six years later and it is a charged off revolving account. it was $200 on my credit now it is over $1000. Do I have to pay that extra money?

Answer 1

Yes, you owe the whole thing.  A credit limit is a limit on what YOU can charge.  It's not there to prevent them from charging you interest or late fees or over the limit fees.  You see where ignoring it has gotten you.  "Charged off" refers to their internal accounting status.  It doesn't mean you no longer owe the money.  If you've gotten any car loans in the past few years, you probably got a higher rate because of the collection item and have paid more than the 1000 in extra interest.

Answer 2

If it has been 6 years since you defaulted then the reporting period is almost up on that account.

The reporting period starts with the first time you became 30 days late and never brought the account current leading to the charge off.

The reporting period is 7 1/2 years, but you can dispute it as obsolete and request deletion near the 7 year mark.

(the extra 1/2 year is afforded to the CRA's by the FTC since often the true compliance date, date of default, is unknown or unclear)

Nothing can reage the reporting period. Once it's up, it's up and the account "must" be removed.

Unfortunately paying will not help your credit. A paid negative is still a negative. Plus paying will update the account to make it appear newer than it actually is. (updating is not reaging, it still must be reported from the original compliance date)

Depending on a persons credit file, it usually takes a year+ for the payment to stop hurting. If it has been 6 years since the default and you pay, by the time it would probably stop hurting you it would be off your reports anyway.

(Cap One does not work with people in deletion of the account upon payment.)

Looking through your past Q&A's, you referenced Texas a couple times.

IF that is the state you live in, the collecting SOL is 4 years which starts running on your last payment or charge on the account before it is charged off.

If you live in Tx and it has been 6 years since your last payment or charge, then you are past the collecting SOL and no longer legally liable to pay.

If you feel like paying, be aware that in Tx. the collecting SOL can be reset with a written agreement, signed by you. A check, money order, etc. signed by you can be considered a written agreement

Answer 3

Very likely.   Unless you declare bankruptcy or enjoy getting annoying calls from collection agencies at early hours of the night.    If you ignore it, it'll totally trash your credit rating, which will potentially s***w up any future attempts to buy a house, car, etc, or even sign up for phone service (cel or land line), as those usually involve a credit check.   It's also been rumored that some companies include a credit check with their background checks on potential employees too.   It'll almost definitely come back to bite you if you ignore this.

There's an outside chance that you can negotiate a smaller fee, seeing as most of it's interest.   However, that's probably a long shot, seeing as the amount is only a few thousand (considered fairly small), and they probably wouldn't see it as a hardship for you to pay it off.  Such negotiations are usually done through a credit counselor or lawyer though, so I don't know how far you'd get asking as a customer.   Worth a shot, I suppose, but don't expect too much.

Answer 4

The best thing to do is call them up and say you recieved a letter in the mail offering you a "settlement amount", and you'd like to pay off your debt for that amount.  The person will ask you how much it was and the settlement amount, yada yada yada.  Just tell them to look up your account, you don't remember the amount of your last bill or the settlement amount offered.  Usually they'll settle for 50% of the amount owed IF you agree to pay it off immediately in a lump sum.  You should definitely pay it off, Capital 1 will continue to report this as "bad debt" until they get paid.