Expert: Michael Brotherton - 1/25/2008

Question
I had a car financed through Onyx for over 3 years with paying almost 10,000 on a 13,000 loan.  I fell behind by 2 car payments due to difficult times.  I did a voluntary car turn back with Onyx.  Onyx said said I would not be "upside down" when I did this but did not put it in writing as the company is out of town from me. Due to having a high interest rate, I ended up owing still around 6000 on the car.  After I turned the car over, I did not hear anything back from Onyx.  About 6 months after that, I received a call from Capital One stating they either merged with the company or bought the company therefore they had the contract for my car loan.  Long story short, I made payment arrangements with Capital One in the amount of 100.00 a month on a "settlement amount" via electronic payments.  I was making these payments for over a year without fail. 2 months ago, I received a threatening call from them stating that if I don't start paying 350.00 a month, they will sue me.  It's been an extreme hardship on me and they won't keep my payment arrangements straight when I tell them I can make the payments.  I pay the 2nd payday of every month but they get this messed up sometimes because I'm paid every two weeks and the days change. This week I called to let them know the date of my 2nd payday and the person I spoke with said no problem and we decided on a date of the 25th.  Shortly after that I received another call from a different person stating their "check" went out to my bank already and if I have ISF, it will negate the settlement and I will lose the money toward it. Can this be legal and can they legally stop the original payments and demand more by threats?  They identify that they are from the pre-legal department for Capital One.  Any help would be greatly appreciated.  

Answer
The main problem is that unless you have these arrangements in writing they are worthless. They can claim you had no long term arrangements. The other problem is they are taking payments directly from checking which I never condone. They are debt collectors and you cannot trust a debt collector.

I would write a letter to Capital One and express your concerns as you did here. Confirm the arrangements in writing and advise them that if they do not honor the agreement you will simply file bankruptcy and void their agreement. They are unsecured and they have no leverage.

If they want to continue the agreement then get it in writing from then or seek legal counsel. They will continue to push you and make demands but if you send a cease and desist phone calls letter it will force them to communicate in writing and stop any phone contact right away.

Good luck