I might leave the country permanently in a couple of month, can I tell the agency that and try to settle for less? If you are negotiating settlements with multiple creditors, it’s better to set up a special checking account for this purpose. This provided some much needed advice. I think the article will give you the basic answers to your question. The corporate cards are generally issued to the corporation itself, even though your name appears on the card, so generally it is not advisable to attempt settlement on this type of account, as it could have a direct effect on your employment status. But there is a huge difference between income and assets, and many consumers who can’t sustain regular monthly payments due to lack of income or other financial hardship are able to use some of their dwindling savings for the purpose of settlements. The former employer reversed total charges of $13K after I left the firm and told me to pay it. Get help with these accounts. Debt validated, and account moved to an in-state legal firm for your troubles! AMEX (GC Services) is telling me that they will not settle with anyone else other than directly with me.  American Express discount rates for retail stores and restaurants will downgrade (meaning the rate increases) if a transaction is keyed-in rather than swiping a card, but most rates are the same regardless of transaction method. If you’re unfamiliar with debt settlement, you’re probably wondering how someone who can’t make their monthly payments would have the funds needed for a settlement at, say, 50% of the total balance. If you’re more than three payments late, the odds are good that you’ll be hearing from an outside collection agency. Charge-offs are considered a very negative credit event and cause significant damage to credit scores. There are definitely situations where a debt validation letter is appropriate and effective. A big part of the problem in dealing with American Express is due to two key factors. You must have a letter in-hand before you make payment on your settlement. American Express is the contractor. I always recommend proactive telephone contact with creditors, and American Express is certainly no exception. If you have a debt collector balking at putting the settlement in writing, then just put your foot down and insist that you will only proceed on the basis of a written agreement letter. American Express doesn’t sell off its accounts but does assign bad debt to attorneys and debt collectors. Debt Settlement Solutions: Slow Torture vs. Fast Relief! Am I able to negotiate a settlement with the 3rd-party collections agency in exchange for them removing the charge-off from my credit report? Hello, I have a credit card with American Express that has an outstanding balance of around $12,000.00. 91st day went to Zwicker....120 days to Apothaker with 0% offer to settle full balance or 55% settlement..lump sum...i'm at 150 days without a payment....close to chargeoff. I have called the service number several times – usually from the service desk at Macy’s. American Express sued my client and the business for the full amount due, plus court costs and attorney’s fees of $630. I do take your point that they are usually lenient with delinquent cardholders seeking to restore the account to good standing. You must have a letter in-hand before you make payment on your settlement. "If you already have a low score, [a charge-off] will still drop your score but by fewer points," says Ryan Greeley, Denver-based editor of the Better Credit Blog. Take the high road and negotiate in good faith with your creditors. Settlement with Amex requires steel nerves and precision timing, and is best handled via a customized full service approach. I also have like 500,000 points. Does my delinquency and other negative activity affect my corporate card and get reported to my employer? Prior to the financial crisis of 2008, American Express was not a bank like most other major credit card issuers (such as Bank of America, JP Morgan Chase, Citibank, etc.). When it comes to settlement with American Express, there are some specific facts about this creditor that you should be aware of. Charles, thank you for the insight. I don’t know who to believe. I have two accounts with American Express. Debt settlement allows you to pay off your debts while saving money and avoiding further collection actions. It’s trivially easy for an original creditor to produce a stack of monthly statements two inches thick and mail it to you. I was sent a list of charges but believed I was not responsible for half of those charges. The first offer you receive from an agency will rarely be the best offer available, no matter how convincing the explanation that this is “the best we can do.”. The American Express billing statement class action lawsuit stresses that because of American Express’s non-compliant disclosures, Zevon and the potential Class are entitled to recover up to $1 million in statutory damages. This is also called an ACH transaction, and it means you provide them the bank routing number and account number off your checking account. This debt was completely my doing, not American Express’s, but I’d certainly take a reduction in the balance due. What Are Your Spending Habits? It’s simply a part of the collection culture that developed at American Express, which positioned itself over the years as being “different” than Visa or MasterCard. I don’t use the corporate card for anything other work related expense that work pays for. If I can get the money from the account that I have with Freedom Financial, should I try to settle directly with GC Services?  It just has to cover the essentials – the account number, amount of settlement to be paid, any payment installments listed clearly with due-dates, and the transaction has to be defined or referred to as a “settlement,” or “settlement-in-full.” Simple enough! The article seemed to say that. Typically, a creditor will either sell a debt that is more than 180 days overdue to a collection agency or employ an agency to help collect payment. They normally do not take payments for less than the total amount. Why is this relevant if you’re trying to reach a settlement with Amex? The company converted to a bank holding company structure in November 2008 in order to become eligible for Treasury Department assistance under the infamous “TARP” program. I offered a settlement of 50%. If you are in a financial crisis, that is enough, and you just need to be patient and persistent. I don’t see it making sense, for example, to tell someone who has $10k with Amex and $20k with other creditors to keep one-third of their debt in place — that only makes the other negotiations that much more difficult, and doesn’t address a significant chunk of the debt problem itself. The Settlement Notice explains the litigation, the settlement, your legal rights and what benefits are available.. Judge Nicholas Garaufis of the United States District Court for the Eastern District of New York is overseeing the case known as In re American Express Anti-Steering Rules Antitrust Litigation (II), No. ZipDebt Debt Relief — MAJOR ANNOUNCEMENT FOR 2020 and COVID-19: Full Service TAILORED DEBT SETTLEMENT Available for Select Clients, Do-It-Yourself Coaching & Services No Longer Offered, How to Settle Your American Express Credit Card Account. more power.. Further, if the account is settled for the less amount than the balance, how does this affect my credit score? Where the risk is lower, we can hold out and try to do better on the settlement percentage. Can they be applied against the settlement amount? Most of them prefer check-by-phone or electronic check (same thing). I have been making minimum payments on time for the past 2-3 years and most of it is interest and my balance remains almost the same. The reason is simple: unlike larger rivals like Visa and Mastercard, American Express serves as an issuing bank in addition to providing card payment … If you are in a financial crisis, that is enough, and you just need to be patient and persistent. Over time, and with a series of negotiation calls, it’s possible to reach a settlement agreement on your American Express card that you can handle. You are aiming for a financial outcome that you can live with, not a world-record low percentage. The charge is past due 3 months or so and I made a payment of $5K today. If you’re facing a legitimate financial hardship and can’t make the minimum payments on your American Express credit card one potential solution is to negotiate a lump-sum settlement for less the balance owed. Reading Tea Leaves. The 36-48 month programs offered by most debt companies have high risk for collection lawsuits. You can avoid this by shaving off no more than $600 on the debt you owe. If those payments were under the required minimums, that could account for the charge-off notation. I have a personal Amex blue card and corporate Amex green card through my employer. It’s common to carry a personal account and then receive one issued by your employer, to cover work-related travel expenses, per diem costs, and so on. American Express also charged late fees on some credit cards based on a percentage of the debt owed, a violation of a 2009 law prohibiting certain credit card practices, the regulators said. I always thought I kept re-aging the account each time I paid it, thus extending the statute of limitations. View the outcome, letters, cost, time to complete. Voila. Other sources for funding settlements might include the sale of household items, collections, cash value life insurance policies, borrowing from family, or sale of property. But my understanding is that Amex will have to send notices to former customers if their accounts qualify for any refund. Ah, that “.5” just kills me! A faxed copy is fine, and in fact most settlement letters are just fax copies of the agreement. Why American Express Chargebacks are Different. Derogatory entries are supposed to drop off after 7.5 years. We feel much better now knowing that the money is going to the original creditor and not to a collection agency. The corporate cards are generally issued to the corporation itself, even though your name appears on the card, so generally it is not advisable to attempt settlement on this type of account, as it could have a direct effect on your employment status. Anything above that amount will be reported and taxed. Normally I recommend bankruptcy because if you are being sued by American Express, chances are … The one unbreakable rule in debt settlement is to GET IT IN WRITING FIRST, before you pay! Voila. It just has to cover the essentials – the account number, amount of settlement to be paid, any payment installments listed clearly with due-dates, and the transaction has to be defined or referred to as a “settlement,” or “settlement-in-full.” Simple enough! You’re in a financial crisis and want to obtain as deep a discount off your balance as possible, but you also have to be mindful of the legal risk that mounts whenever you are behind on payments with a creditor. When negotiating credit card debt with American Express, it's in your best interest to know exactly what you're dealing with. Thanks a lot for any insight! Consumer Borrowing Up in June. Copyright 2020 Manchester Publishing Company, Inc. All Rights Reserved, Making the Tough Financial Decision, Part 3 — Paying Off $63,000 Credit Card Debt & Lessons Learned, Making the Tough Financial Decision, Part 2 — Our Dream Home Goes on the Market, Making the Tough Financial Decision — Our Dream Home Goes On the Market. If you’re more than three payments late, the odds are good that you’ll be hearing from an outside collection agency. If you are negotiating settlements with multiple creditors, it’s better to set up a special checking account for this purpose. That way you can react quickly in case anything goes amiss. I always recommend proactive telephone contact with creditors, and American Express is certainly no exception. It’s still actively reported as a charge-off on my CR, but, aside from our mortgage, it is my only account with any sort of balance on it. - Jenie, Attorney General Presentation About How to Stay Off the Radar. These are one-time funding sources, in other words. The process is different, though, in that it is typically more straightforward. Any idea why they would do this when the other accounts from other creditors are just listed as something like “Closed – debt mgmt plan”? WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today announced an enforcement action with orders requiring three American Express subsidiaries to refund an estimated $85 million to approximately 250,000 customers for illegal card practices. If you’re like most clients, you’ll feel a tremendous sense of empowerment at achieving a successful settlement. As the negotiation proceeds, resist your initial urge to jump your offer right away, and give it some time to see how things go first. American Express is not a “bluff” creditor, so we do take any legal threats from them seriously once a file has escalated to placement with a collection attorney firm (licensed to operate in the client’s home state). One important tip for determining the risk factor is to assess WHERE the assigned collection agency is located. I’m in a Debt Settlement program with Freedom Financial. THANKS! The reason this matters is because there are some important differences that need to be taken into account in terms of the “collection culture” at different types of creditors. Sometimes these alternate programs can include low interest rates and lower monthly payments, and for some consumers this level of relief alone may provide sufficient breathing room to get a handle on their financial situation. If you are facing a default situation with American Express and would like to have some professional assistance in resolving the matter, please read my 5-part series on Tailored Debt Settlement. The reason is because they have the documentation. payment to credit bureaus will be reimbursed the money they paid plus interest.” So it’s possible you might receive some relief on this account. The reason is because they have the documentation. American Express denies these claims. Once the money received from a one-time source has been expended, there is no more to replace it. There are NO exceptions to this rule. In such situations, the risk is greater, so we accept a higher figure than we might otherwise. Otherwise they are hard to work with. There are NO exceptions to this rule.  Milton here from Complete Debt Solutions – What Amex are telling you is they don`t recognize this company or they have “a” history. Listen carefully to these proposals and note them down. I am behind 120 days. After Charge off: Settling American Express debt for optimal savings can require your account to be charged off. Am I reading that right? 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