Two credit cards with Cap One = one lawsuit or two?

[cityish]

Hi, here is my situation.

I have two CapOne cards --- with respective balances of approx. $4,500 and $2,500.

I also have two Washington Mutual cards with balances of $6,800 and $3,300.

I have a complicated situation including medical bills and cannot pay.

I can't file Chapter 7 because I filed Chapter 7 six years ago and due to the new laws, there has to be at least eight years since your last one.

I'm probably going to end up with the CapOne and WaMu cards being charged off.

If I get sued eventually, would CapOne do two lawsuits based on the individual cards and balances? Or would they roll them together into one combined balance and do one lawsuit? Same question for WaMu.

Thanks for any advice.

[HHM]

Probably 2 suits since collection accounts are assigned on an account by account basis.

[cityish]

OK, thanks a bunch. I appreciate your feedback.

[magyar123]

I assume it will be one suit for both cards.

[cityish]

Really? That's what I'm worried about. I'm afraid if they considered it as one larger lump sum balance, then they would be more likely to sue. Agh...

[HHM]

It would be rare if Cap One sued you directly. More likely it will be a debt buyer. It's possible that they could lump them together in one balance, but I doubt it. Assignment to collection agencies or debt buyers works on an account by account basis. CapOne is not going to combine your accounts into one, it just doesn't work that way.

Also, your assumption that they are more likely to sue because of a higher balance is actually wrong. The sweet spot for collections is $0-$2000 range. The yeild (i.e. the percent of successful collection and ability to collect 100% of the balance) on accounts in that range far exceeds other collection balance ranges.

In any event, I would not expect to see a combined lawsuit.

[cityish]

Wow, I never thought of it that way --- that $0 to $2,000 accounts were more likely to be collected.

I just assumed that the more you owe, the more likely they'd go after you and hunt you to the ends of the earth until you pay.

Perhaps then my overall financial situation will work in my favor, in a twisted kind of way... Right now I'm up to my ears in debt and don't earn a great deal of money.

I'm in foreclosure to the tune of $210k owed to primary and secondary lenders; plus $20k total of additional credit card debt. I earn $38k as a public school teacher. No assets other than a seven year old Honda that is paid off.

I think my biggest worry should be possible wage garnishment. If I get a judgment, I'm hoping I can drag it out by appealing and then ultimately file for another chapter 7 to dismiss the judgment(s). We'll see.

At any rate thanks for your input. I appreciate it.

[HHM]

Don't get me wrong, what I said does not mean someone won't try to collect against you.

There are many variables that are considered in the decision to sue.

But just concerning yield, look at it this way...if I am a debt buyer and I am going to spend $10,000 to buy a portfolio of debt of $500,000; I would rather see an average balance of $1500 in that portfolio because I can reasonably expect to collect 8-10% of that portfolio, i.e. $40,000-$50,000, or potentially a 400+% return on investment. Compared to a portfolio with an average balance of $6,000, I might only expect a yield of 3-5%, or $15,000-$25,000.

[cityish]

I know there are never any guarantees and none of us has a crystal ball. But whoa -- I never knew that about the success rates of collections for various amounts!

Thanks for the info!!

[GoingDown]

Really? That's what I'm worried about. I'm afraid if they considered it as one larger lump sum balance, then they would be more likely to sue. Agh...

Not true.

I got sued by Capitol One for a $300 credit card that ballooned to $600 with fees and interest. I'm judgment proof so they haven't been able to collect a penny from me yet.

But I have other charged off credit cards with balances over $13,000, and they have never bothered to sue me. My guess is that it costs a LOT more to sue in Maricopa County Superior Court than it does in Phoenix Justice Court (small claims court). And since they know I'm judgment proof, they don't want to spend the cash necessary to sue me in Superior Court.

What I've noticed, with the exception of Capitol One of course, is that the main thing a creditor looks for to determine whether or not to file a lawsuit is whether or not they can call you at work. If they can't figure out where you work, they know it might be really hard to garnish your wages, so they don't want to bother with it. The other thing they look for is a mortgage on your credit report. If they see that, they know they can slap a lien on your home. If they can't find either of these two things, they will probably sell off the debt to junk debt buyers.

[cityish]

Not true.

I got sued by Capitol One for a $300 credit card that ballooned to $600 with fees and interest. I'm judgment proof so they haven't been able to collect a penny from me yet.

But I have other charged off credit cards with balances over $13,000, and they have never bothered to sue me. My guess is that it costs a LOT more to sue in Maricopa County Superior Court than it does in Phoenix Justice Court (small claims court). And since they know I'm judgment proof, they don't want to spend the cash necessary to sue me in Superior Court.

What I've noticed, with the exception of Capitol One of course, is that the main thing a creditor looks for to determine whether or not to file a lawsuit is whether or not they can call you at work. If they can't figure out where you work, they know it might be really hard to garnish your wages, so they don't want to bother with it. The other thing they look for is a mortgage on your credit report. If they see that, they know they can slap a lien on your home. If they can't find either of these two things, they will probably sell off the debt to junk debt buyers.

$300, that blows me away.


I am losing my house to foreclosure right now, so the lein wouldn't work.

As far as them knowing where I work -- I'm really not sure. This summer I was trying to work things out with my creditors and I remember a phone conversation where I told one of them that I am a teacher. But I don't remember whether I said the name of the district where I teach. I pray to God I didn't tell them the name of the school where I work. I would crawl under a rock and die if they called the front office and the principal got wind of it. Holy cr@p. This is scaring the bejeezus out of me.


When I moved out of my foreclosed house and into an apt., like an idiot I blabbed and told all of my creditors my new address. I would give anything if I could take that back. I could have bought some time by making them hunt for me.

[No Gravy]

But I have other charged off credit cards with balances over $13,000, and they have never bothered to sue me. My guess is that it costs a LOT more to sue in Maricopa County Superior Court than it does in Phoenix Justice Court (small claims court). And since they know I'm judgment proof, they don't want to spend the cash necessary to sue me in Superior Court.

Now there's a possibility I hadn't considered...thank you.

[HHM]

Exactly, knowing the jurisdicational limits of the variuos levels of court in your area is important. You will almost certainly not get sued in your highest disctrict court level because the process is not as streamlined as small claims or the middle level court. It really just depends on the area.

[No Gravy]

Don't get me wrong, what I said does not mean someone won't try to collect against you.

There are many variables that are considered in the decision to sue.

But just concerning yield, look at it this way...if I am a debt buyer and I am going to spend $10,000 to buy a portfolio of debt of $500,000; I would rather see an average balance of $1500 in that portfolio because I can reasonably expect to collect 8-10% of that portfolio, i.e. $40,000-$50,000, or potentially a 400+% return on investment. Compared to a portfolio with an average balance of $6,000, I might only expect a yield of 3-5%, or $15,000-$25,000.

Excellent point. And here I was more worried about owing CitiBank/Home Depot $18k than JCPenney $70.

[No Gravy]

Hi, here is my situation.

I have two CapOne cards --- with respective balances of approx. $4,500 and $2,500.

I also have two Washington Mutual cards with balances of $6,800 and $3,300.

I have a complicated situation including medical bills and cannot pay.

I can't file Chapter 7 because I filed Chapter 7 six years ago and due to the new laws, there has to be at least eight years since your last one.

I'm probably going to end up with the CapOne and WaMu cards being charged off.

If I get sued eventually, would CapOne do two lawsuits based on the individual cards and balances? Or would they roll them together into one combined balance and do one lawsuit? Same question for WaMu.

Thanks for any advice.

Others have already answered the question of individual balances vs one big lawsuit, I just wanted to add that all collection calls and efforts are done per account. So, 2 accounts = twice the collection calls from Cap1.

It could be worse. I had three accounts with them.
800-955-6600 on my caller ID. Sad I know their number from memory...