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Capital One Credit-Card Holders Face Significant Increase in Defaults

Consumers should be warned that there has been a significant increase in the number of defaults by credit card holders of accounts issued by Capital One, one of the biggest issuers of credit cards in the world. Since the end of the recession, more and more Americans have been catching up on their debt and putting behind them the times when they repeatedly failed to pay their bills. Unfortunately, new information about a rise in defaults for Capital One indicates that this trend may be reversing itself. Credit-card default is a serious problem and can severely affect consumers’ financial standing now and in the future. If you are facing default on any credit account, contact our experienced bankruptcy attorneys at Oklahoma Legal Center to discuss your best course of action.

Capital One Reports Rise in Default Percentage

According to its monthly filing with the Securities and Exchange Commission, Capital One noted an increase in the percentage of accounts that were moved into “default” during the month of April 2012. According to the lender, default accounts rose to a rate of 4.07%, which indicates a noteworthy increase when compared to the rate the previous month, which was 3.85%. Credit-card default occurs when you borrow money on your credit card and are unable to pay it off. Default of this kind can mean serious consequences for your finances, including having a dramatic effect on your credit score and inhibiting your ability to rebuild your credit in the future.

Credit-Card Default and Charge Off

When a credit account is moved into default, it means that the credit card company has declared that the account is uncollectable. This usually occurs after payments are missed for 60 or 90 days, during which time you continue to incur interest and late fees. For up to 180 days after your initial payment was due, the credit card company will likely continue to try to collect payment. If they are unsuccessful, they will be required to “charge off” the debt, which means they must remove it from their accounts receivable books. This doesn’t mean that you are no longer liable for the debt; it usually means that they sell the account to a collection agency who will in turn try to collect on the delinquent account. Credit charge offs will appear as derogatory items on your credit score and will likely affect your credit score considerably.

Legal Help for Consumers Facing Credit-Card Default in Oklahoma

During the recession, the adverse effects of credit-card default and delinquency were compounded by increases in lending standards that made it nearly impossible for many consumers to borrow at all. As the economy improves and consumers are able to better handle their finances, lenders are once again giving consumers with lower credit scores access to new accounts. While the new credit sounds like it could help consumers, some experts believe this may be leading to an increase in credit-card default and charge offs. If you are having a difficult time paying your credit card bills, or if you are facing credit-card default because of missed payments, our bankruptcy attorneys at Oklahoma Legal Center can help. In situations such as these, it is important to seek guidance from a professional who can help you make the right financial decisions. Our lawyers are extremely knowledgeable and can help struggling consumers in Oklahoma improve their financial standing.

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