Capital One caught collecting over 15,000 accounts that were discharged in bankruptcy

Bankruptcy is designed to be a last-resort option for people with serious financial problems. When someone files bankruptcy, her debts are discharged, which means that they are no longer legally owed. Apparently, however, Capital One didn’t get the memo on how bankruptcy works.

A auditor appointed by a bankruptcy court in Massachusetts found that Capital One pursued over 15,000 claims for debts that had been discharged in bankruptcy. Yup, our good friends at Capital One seem to have made a practice of trying to collect debts that they have no legal right to collect. Capital One, of course, denies any nefarious intent, but their actions speak much louder than their words. In fact, according to the WSJ article, the Chief Judge of the U.S. Bankruptcy Court in Mississippi has demanded that a representative from Capital One appear in court and provide proof that the company’s pattern of collecting discharged debts is a “legitimate error and not a conscious, malevolent effort to go out and collect a debt that’s been discharged.”

Capital One’s pursuit of discharged debts is not only a violation of the bankrutpcy code. It’s also a violation of the Fair Debt Collection Practices Act. Among other things, the FDCPA prohibits debt collection conduct that is unfair or untrue. Do you think it’s fair to pursue someone for a debt that isn’t legally owed? Me neither. And do you think that saying in a lawsuit that someone owes a debt when they don’t actually owe the debt is untrue? Yup, me too.

What’s in your wallet? Capital One’s greedy hands, apparently.

Debts Go Bad, Then It Gets Worse | The Wall Street Journal | December 23, 2011

If you live in Minnesota and Capital One–or any creditor–has attempted to collect a debt that was discharged in bankruptcy, please contact us to discuss the situation further. We offer a free case review for all FDCPA cases and if we agree to handle your case, you won’t have to pay us any money up front. Our fees come from the money we recover for you if you win your case or accept a negotiated settlement.