Ok, today we have recieved a letter from Capital One, with a proposed new CCA agreement - with a letter admitting that there were mistakes on the previous agreement, and to sign this and send it back to them asap.

Does this mean the CCA with Capital One is unenforcable? In truth, I've never done anything like this before, and I almost feel dirty doing it...but there's plenty others getting out of agreements like this, so I figure I might as well join in!

My guess is that you either agree to the new CCA and continue using the card or, if you don't and try to avoid paying the debt, you will not be able to use the card anymore and may struggle to get another one.