How to Settle Your American Express Credit Card Account

By Charles
In May 4, 2012
22648 Views

[Note: This article originally appeared as a guest post on Steve Rhode’s blog at GetOutofDebt.org. Thanks to Steve for permission to repost here on The ZipDebt Blog.]

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. 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. 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. 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. These are one-time funding sources, in other words. Once the money received from a one-time source has been expended, there is no more to replace it. But such funds can be put to excellent use in retiring a major credit card debt, when otherwise the customer would just be facing an unsustainable situation (which in turn often leads to bankruptcy).

When it comes to settlement with American Express, there are some specific facts about this creditor that you should be aware of. 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.). 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. 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. For example, most of the major credit card banks eventually SELL their delinquent accounts to various debt purchasing companies, so when you are trying to settle an old charge-off account it’s very possible that you’ll be dealing with a debt purchaser or their collection agency. Yet it’s highly unlikely you will encounter this situation with respect to any type of American Express account. This creditor rarely sells its accounts, no matter how old. 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.

Why is this relevant if you’re trying to reach a settlement with Amex? Many websites offering advice on settlement of credit card accounts recommend sending “debt validation” notices to collection agencies or creditors, in theory “putting them on notice” that you are aware of your consumer rights and demanding copies of their backup documentation. There are definitely situations where a debt validation letter is appropriate and effective. However, when you are trying to settle an American Express account, it would be a major tactical mistake. The reason is because they have the documentation. It’s trivially easy for an original creditor to produce a stack of monthly statements two inches thick and mail it to you. Voila. Debt validated, and account moved to an in-state legal firm for your troubles!

The first rule in settlement with American Express is therefore to avoid any sort of tactical “games” like debt validation, which are generally unnecessary anyway. I always recommend proactive telephone contact with creditors, and American Express is certainly no exception. Get on the phone a couple of times a month and let them know about your situation. Be aware that you’ll hear various kinds of options presented to you depending on how far behind you are on payments. For example, if you are two payments behind, the representative will generally not discuss settlement yet and will only speak in terms of different payment options. Listen carefully to these proposals and note them down. 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’re more than three payments late, the odds are good that you’ll be hearing from an outside collection agency. It’s quite common for American Express to assign their accounts to third-party collection agencies well before the point of charge-off at 180 days late, often as early as 90 days late. Don’t panic if this happens! Understand that the majority of settlements with American Express are negotiated through these third-party collection agencies.

Achieving a settlement with any creditor is a matter of balancing RISK versus SAVINGS. 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. One important tip for determining the risk factor is to assess WHERE the assigned collection agency is located. If they are not a law firm and they are in some other state than yours, then the situation is low risk compared to assignment to a law firm in your state. 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). In such situations, the risk is greater, so we accept a higher figure than we might otherwise. Where the risk is lower, we can hold out and try to do better on the settlement percentage.

Let’s say you are talking with a third-party agency in a different state and they have agreed to a 40% settlement. You are happy with the result and you can fund the settlement ok. The one unbreakable rule in debt settlement is to GET IT IN WRITING FIRST, before you pay! You must have a letter in-hand before you make payment on your settlement. There are NO exceptions to this rule. A faxed copy is fine, and in fact most settlement letters are just fax copies of the agreement. This isn’t a matter of “trust,” or “distrust.” It’s just simple common sense that any agreement modifying your contract with American Express (or any other creditor) must be in writing. 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. It doesn’t have to be long! 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!

With your letter in hand, then you can make your payment. Cashier’s check by Federal Express is one method, but you want to be sure that you’ve coordinated payment method with the agency. Most of them prefer check-by-phone or electronic check (same thing). This is also called an ACH transaction, and it means you provide them the bank routing number and account number off your checking account. If you have it in writing first, it’s ok to do this. 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.

One more important point about settlements with American Express. Many consumers have both personal and corporate cards issued by this creditor. 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. 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.

Take the high road and negotiate in good faith with your creditors. Don’t play games or make up stories about your situation. If you are in a financial crisis, that is enough, and you just need to be patient and persistent. Start out with an offer around 20-25% of what you owe, but state this in terms of a dollar amount. You are aiming for a financial outcome that you can live with, not a world-record low percentage. 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. You can always increase later. 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.”

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. Don’t be greedy. Once you reach your goal, accept the settlement and take the deal off the table. If you’re like most clients, you’ll feel a tremendous sense of empowerment at achieving a successful settlement. It can be a huge game changer financially, as well emotionally.

If you’re drowning in debt and want some expert advice and coaching as you negotiate through your settlements, please request a free 20-minute phone consultation. We offer training and coaching programs for every budget, and our mission is to help you negotiate effectively and settle your debt accounts quickly and safely.

282 Comments

  1. The article seems to say do not try to settle with Amex if you also have a corporate amex account with your employer. Am I reading that right?

    I have a personal Amex blue card and corporate Amex green card through my employer. Does my delinquency and other negative activity affect my corporate card and get reported to my employer?

    Your help would greatly be appreciated.

    Thanks
    John

    • John, in the article I advise against attempting to settle an American Express account issued to you via an employer. Whether or not you can settle on the personal card and still keep the corporate account depends on how the corporate card was issued. In many cases, the “corporate” card is still personally guaranteed by you, so if you default on your regular personal card, eventually Amex will close the other one for further use, or at least greatly restrict the amount of open credit available to you. If the company is 100% responsible for the card, and you never personally guaranteed it, then delinquency on the personal account shouldn’t affect the corporate card.

  2. Charles, thank you. That makes sense. They never looked at my credit for the corporate card and I know people have been fired for charging personal items on it, I don’t think I am the one guaranteeing it, but I have to look in to it.

    I don’t care if they close the corporate card because I don’t really need it. I was even thinking about closing it before I settle my personal card. I just don’t want anything derogatory getting back to my employer. Because of the settlement or being past due on my personal account.

    Thanks,
    John

  3. Charles,
    I had a corporate card with Amex that I was personally responsible for. The company I worked for is a contracting company and I was employed overseas. I became ill and could no longer work for the company, but still had a balance of over $5K on the card. Due to my unemployability, I was never able to pay the account off and it remains on my credit. This is from 2007. I am finally in a position to pay off the balance. After reading your article, I was wondering if I should take their first debt settlement offer or if I should try to negotiate for a lower percentage?
    Thank you very much for your help!

    Lucy

    • Lucy, you may not want to bother settling it at all, depending on the exact situation. You’re already 5 years through the 7-year reporting period for a delinquent account on your credit report, so it’s going to drop off anyway in another couple of years. If the concern is to re-establish credit, settling it now as this late date won’t necessarily buy you an increase in score, since a settlement is still a negative entry. Of course, if there has been a judgment against you, then you should make arrangements to pay off the balance and thereby satisfy the judgment. If you’re looking to get a credit card from Amex again, then most likely they will require the full balance to be paid off before granting new credit. But FYI, there was an announcement today that the Consumer Financial Protection Bureau had fined Amex for insisting that old forgiven balances be repaid before a new credit application could be approved (even years after the original default). So we may see a policy change on this from Amex.

  4. Thank you for your advice, I have been seeing Amex in the news recently for settlements and fines that they are having to pay. Perhaps it is just best to wait until the 7 year mark hits as I am getting fairly close to 6 years now. And, there was no judgment, they kept the debt. I just may be buying a house again within the next year and it’s the only negative account left on my credit. Everything else has been removed or paid…

  5. Hi Charles, I am primary signer on a AMEX platinum card for a company account I never used the card but the company fail on hard times I couldn’t pay the bill. The balance was $180K now it’s around $70K but the owner of the company is ill and can’t work therefore can’t make payment. The company had an agreement with AMEX attorney’s(in a different state then I’m in) to pay $1500 per month but is no longer able to pay. What should I do because I can’t afford that payment? Nor can I afford a lump sum payment.

    • Nicole, sorry to hear about your situation. If you are indeed the primary signer on this account, then you are exposed to legal risk and sooner or later Amex will litigate their claim. If you are not in a position to make payments, and also not able to raise a lump sum for settlement, then you should discuss your situation with a local bankruptcy attorney to see if that option makes sense. I realize that’s probably not what you were hoping to hear, but Amex will definitely sue over a $70k balance, so you should at least understand how the BK option could protect you if/when it comes to that. Given that the company’s owner set up the payment plan, it may be that they go after him first, but if you personally guaranteed the account and the owner files BK, then you could be left holding the bag. You may also want to discuss with an attorney the facts behind how this situation developed, because it’s quite unusual to see an employee getting stuck with a debt that was not a result of their own purchase activity. It may be that there is a way to get the company to indemnify you against a legal claim from the creditor. The bottom line is that you really should get some legal advice on this matter before taking any further action.

  6. I have 2 AMEX charge cards, each card has a balance of 10,000 aprox on each. I have been paying in full each month for the past years, and currently am. But it looks like I will not be able to get them the full balance this month and may take me 4-5 months to get it paid off. I know if I am late then it will affect my credit score which I have a score of 700 above and do not want to hurt it. What do you suggest? Try to call them and make a payment plan? Make no payment and try to settle and ask to remove from file? I have other credit cards with small balances and those will not be affected. I am currently trying to refinance my home with cash out but with this high balance with amex it may affect the loan. Catch 22. I am trying to take a loan to payoff amex.

    • Andrew, if your goal is to avoid damage to your 700+ credit score, then you should not attempt settlement. If you do, it will severely damage your credit, and Amex will not help you clean up the mess! Your best bet is to be proactive and let Amex know what is going on — they have alternate hardship programs you could participate in that will minimize any damage to your credit score. Regarding the home refinance, I’m never a fan of trading unsecured debt for secured debt, since many consumers fall into the trap of adding back CC debt on top of the new higher mortgage payments. However, if you do take this approach, you might improve your chances of qualifying by requesting the lender to disburse the payoff directly to Amex.

  7. I have two American Express cards with a total balance of $18,500 (one gold and one platinum). Between the economy and a general loss in business we have determined that we will not be able to pay the balances in full and, in fact, will only be able to make a small payment to each of them. The cards have been closed, by AmEx, and today we received a call from them for payment on the platinum card. When we told them we could not make the payment they offered the Hardshp Plan with payment in full occurring in 12 months. The payment amount on this one card is way over anything we can pay per month so I know there is no way we can pay the hardship amount for both accounts. I feel that we should make an effort to pay what we can each month to these accounts to show goodfaith that we are willing to pay these cards but I’m not sure that that will help us in any type of settlement. Bankruptcy is not an option for me as it will truly adversely affect my job which will only create even more of an issue. All other cards and house note are being paid as agreed. Should we make payments as we can regardless of the amount, should we not…I’m truly confused and just want to do the right thing here.

    • Lele, when you underpay the minimum payment for a revolving credit card account, the creditor applies the payment but the account will still move forward toward charge-off, and follow the usual collection cycle anyway. In other words, you are just postponing the inevitable and draining off funds in the process. You really need to coordinate a payment plan with Amex if you want to avoid the unpleasant consequences of default with this creditor. Based on how you’re describing your financial situation overall, I think it would make sense for you to request the free 20-minute consultation with me. Please see the link at the upper right of this page, thanks.

  8. I have a AMEX Blue personal account with a balance over $23K. I have had the account since 2004 and never missed any payments. I became unemployed more than a year and a half ago and my unemployment has run out. I entered into a payment plan in May this year with 0% for 6 as they have suspended my charging as well. I am still unemployed and experiencing severe hardship at the moment. My wife is working PT and helping as much as possible but we have 3 kids and cannot make ends meet anymore. I’ve paid on time through the payment plan as promised but by January that wont be possible anymore. I want to pay this account but its to hard. I have a 401K that I have no choice but to cash in just to make ends meet. I would have about $12K I could offer them in settlement. What are my chances since I’m not currently delinquent. Any suggestions?

    • Jeff, you won’t be able to settle $23k with $12k while in current standing. It’s not just Amex — no major creditor will accept 50% settlements or less until they work you over first via the collections process. It’s definitely possible to settle with this creditor, as I outlined above in the original article, but usually the earliest is after 90 days late, and more likely 120-150 days late. Based on your situation as described, I recommend that you consult with a couple of local bankruptcy attorneys to compare options. If you are eligible for Chapter 7, that may be a better solution for you, compared to diverting precious remaining funds to a settlement, especially if you will be incurring extra tax liabilities by draining a retirement account. If you will be stuck with Chapter 13, then settlement may still make sense — so feel free to get back in touch depending on what you find out.

  9. Hi Charles,
    My husband knew a bankruptcy attorney who is local and while we are not filing bankruptcy we are going to have one of his associates handle the Amex card. In fact he has already sent them a letter stating that he is the one to be contacted during this process. While this got started my husband and I called several of our other cards that had very high rates and were able to work out lower rates with them and fixed monthly payments until paid in full. All steps in the right direction I believe.

  10. received a “Settlement Offer” letter from amex regarding a balance owed and unpaid for several years. The letter summarizes the account as follows:
    Balance owed:$9600
    Settlement Offer: 70% balance
    Then in the lead paragraph, it states “If you will pay 30% of your balance owed over the next 24 months, you can avoid further collection activity on your past due American Express Account and satisfy the balance owed. That’s $120.27 a month”
    in the closing paragraph, it says “This opportunity allows you to pay down your balance and avoid additional collections activity.”

    I can’t figure out if they are offeriing to settle the whole amount for 30%, paid over 24 months, or if this is just a lead-in, to get me to pay it all or maybe 70% Any thoughts? thank you

    • EB, it sounds like a 30% offer, but I would need to see a copy of the actual letter in order to answer your question. I do offer document review service. Please email me at charles@zipdebt.com if you would like further assistance.

  11. Good day Charles. Got a $3000 balance on my Amex card, been paying full for the last 3 months, but my regular job is closing down probably next year working with acontractor, and I’m experiencing delayed on his check issuance already, tried applying for payment options but I’m not eligible. Any thoughts on how will I settle this? I got a part-time job but couldn’t pay the full amount. Thanks for any insights that you can offer

    • James, payment options and settlements are two different things. In order to have a shot at a settlement (at 50%, for example), you would have to haggle with their collection agency as the account goes farther behind. Of course, this is damaging to your credit, and it means that technically you are at risk of litigation. But most of the time it’s possible to work things out with the creditor so the fireworks are avoided. The key would be the ability to raise funds to pay a settlement when the time comes. It’s difficult to provide substantive instructions in a short blog reply — I have an 8-hour training course available on how to implement the settlement strategy. :-)

  12. Hello Charles,

    I am trying to figure out how to settle my mother’s amex card which currently has about $8000 on it. She has gone over her limit and is barely making monthly payments. However, she has not defaulted or gone to collections, but can’t seem to get out of the hole with monthly payments. I have the ability right now to help her pay about 50-75% of the owed amount and called amex to try to settle with them. I hit a wall with all the supervisors I spoke with telling me they don’t do settlements anymore. That is hard for me to believe. I read through your responses to some of the posts and if I am understanding correctly, it seems that the only way that amex would be willing to consider settlement is for accounts that have already gone to default or collections, and not accounts that have made payments, is that right? Do I have any chance of settling with them if the account is not in default and what are the pros/cons of allowing my mother’s account to go into collection but stopping the payments in order to settle in the future? Thank you for any help or insight you can provide on this.

    • Sofia, I can tell you that you have virtually no chance of reaching a settlement while the account is in current standing. Settlements are what creditors do when they are otherwise looking at a write-off on the balance anyway, so this means that settlement is generally viewed as an alternative to bankruptcy. On the plus side, there is a possibility of settling for less than the full balance, often 50% or less. On the negative side, the settlement process means major credit damage, and potential risk of litigation (although it is normally possible to settle prior to any judgment taking place). Also, if your mother has other CC accounts in good standing, those creditors may react to her declining score by lowering her available credit.

  13. Hi Charles..

    I have an old AMEX account that is $33,500.00. Due to financial hardship, I haven’t made a payment in over a year, more like a year and a half. I have gone through several collection agencies and my credit report says the debt has been written off. But I still get calls from AMEX and I got a letter offering $18,400.00 which is a 55% settlement. I would like to counter offer to something much smaller than that so I can afford it. What is the lowest percentage that you have seen AMEX settle for? Thanks for your help!

    • Kim, I have to say that it really doesn’t matter what the lowest percentage settlement is that I’ve seen with this creditor. Apples do not equal oranges and just because one person gets a lower percentage does not mean that same deal would be available to you. The reason is because there are numerous factors that play into the outcome — what state you live in, how vulnerable you are to wage garnishments or liens, the long-term history of the account, what else they see for activity on your credit report, which agency has the assignment, and so on. You are also overlooking the possibility of a “term” settlement, meaning one that gets paid over 12-24 months. If you would like help resolving this, please consider getting some coaching help. That is precisely what my ZipDebt program is intended for!

  14. Hi Charles,

    I currently have the amex gold card i have had amex for the past 3years lately i have had a bit of financial challenges although i have made my payments on time within my billing period after a financial review i was given a credit limit for this month i know that i may not be able to make the full payment should i call amex to make them aware of this and what payment options if any would be offered i would really like to keep this card going forward

    • Lonie, yes, if your intention is to keep this card in good standing, then you cannot just ignore the situation and expect them to react favorably. Call the creditor, explain that you are in a temporary bind and could use their help to get through it without damaging your credit. Find out what your options are before the situation deteriorates further.

  15. Hi~ I thank you in advance for your advice! I owe Amex $13,000 And I fell behind in payments due to the recent hurricane. TheY closed my account & sent the issue to a law firm “Jaffe Asser” in my State. Now I do have every honest intention to pay but they are asking me for full balance in full which I cannot pay. What are my options? Will they offer a payment plan? Will they take me to court? Any info will help! Tha nks

    • Edward, anytime a creditor assigns a debt to a law firm based in your state, there is a risk of litigation against you for the claim. It is normally possible to avoid such litigation by working with the agency or law firm, and sometime even a small payment will keep the wolves at bay. Don’t just ignore the problem and hope it will go away on its own. Talk to them and work it out. Of course they are starting out asking for the full balance, but they know that is unrealistic, so yes, a payment plan is normally one option. In fact, even when a debt like this goes to an actual lawsuit, it’s usually possible to negotiate a payment arrangement so that it doesn’t become a judgment against you (that might lead to a wage garnishment). Lump sum settlements are also often possible, but with the legal threat, it’s harder to drive it down to a low percentage.

  16. Charles~I am ashamed to say that I have just under a $14,500 balance on an American Express Blue card obtained through Costco. I do not work currently (did when I got the card) and so my husband is really the one now paying, even though it’s from a joint account. I’m over 50 and getting a job is proving to be extremely difficult, so at this stage I’m looking at just trying to get a minimum wage job somewhere to at least help a tiny bit. Generally just a little over the minimum each month is paid, but my husband’s income is going down this year and we also have major auto repairs that can no longer be ignored. Subsequently, it’s becoming more and more difficult to make the payments and I would really like to know what my best option would be since I have always made my payments. Would it better for me to go into default or to look into some sort of bankruptcy since our house is in my husband’s name only (to get lower rate than with my credit rating included) right now after refinancing.a couple years ago . I also realize now that paying more than the minimum probably doesn’t help my plea to AmEx, so how should I proceed with them?

    • Anne, my view is that it’s always a wise move for someone facing serious financial pressure to sit down with a bankruptcy attorney to review that option. But if this is the only problematic debt you’re dealing with, then I would not give up just yet. For one thing, it’s a joint account, so a default would also damage your husband’s credit standing. Also, if you are indeed able to gain employment, then you might be able to pay down the debt the old-fashioned way and continue with this account as an emergency life-line against unexpected future expenses. In other words, settlement is not always the right solution, and in your case, I would take that approach only as a last resort if you are unable to continue paying at least the minimum amount. You can also talk to the creditor about your situation and see if any of their internal hardship programs might help you stay the course until you find work again.

  17. Our Amex card was canceled about 3 years ago when the balance was $21,000. Since them I have been religiously paying it on time and at least double the amount due. It is now about $7,500 and I am going to have to leave my job in a few months due to health issues. I called AMEX today and was told that a month a go they suspended all “negotiated settlements.” I asked if there was anyone else I could talk to and the (very nice) gentleman said that if I’d called a month ago he would have been able to transfer me to a department that would work with me. But not now. He suggested trying in a month because “you never know how these things work.” What do you think? And what should I do now?

    • Marilyn, it’s very common for creditors to adjust settlement policies and procedures at year-end or the first of the new year. It is virtually impossible for any major creditor to take a “no settlements ever” policy and stick to it for long. I’ve seen it attempted time and time again, and the creditor always returns to settlements sooner or later anyway. For one thing, if you don’t pay a credit card debt for 6 months, the creditor has to record a loss of 100% of the balance and try to recover after charge-off via collection agencies. The rep was basically telling you to sit tight until they figure out what their settlement policy will be this year, etc. The bottom line is that if you cannot pay, then you cannot pay, and if you are forced to miss some payments due to loss of income, Amex will offer you some type of hardship payment plan (or a settlement) to avoid the looming charge-off.

  18. I have a $60K balance on Amex. I live in Maryland and have large monthly payments of $10K and have never missed one in 10 years. Unfortunately my company is cutting salaries and bonuses and I will not be able to make those payments anymore. If I could get a 12-month payment plan, I know I could get it back on track. My question is do I reach out to them now or wait until I have missed 2-3 payments.

    • Doug, if your goal was to settle the balance, then it would be necessary to position for it by allowing the account to push forward toward the charge-off deadline. But if your goal is to maintain this account and relationship, then it would make more sense to talk with the creditor while current, or near-current.

  19. I have a 35k balance and have been deliquent for 5 years. I just recieved a letter from amex saying that they are crediting my account 38 dollars bec they didnt send me a statement for the billing period ending in 11/2008..why would they do that? is it to stertch out the statute of limitations? thanks in advance…

    • Joe, this credit you received has nothing to do with re-aging the SOL clock. What has happened is that American Express was recently fined by the Consumer Financial Protection Bureau (CFPB) for various illegal practices pertaining to their credit card products. Lack of billing statements for certain periods was one of those errors, hence your $38 credit on the account.

      For the benefit of other readers who have received refund checks or notices from Amex, here is a link to the official press release from the CFPB.

  20. I settled with Amex for about 50% through a direct withdrawl from my bank account, but never got a letter or confirmation. That was september 2012. How can I be sure they cleared the whole debt? Thanks.

    • Ron, the easiest way is to run your credit report and see if they updated the entry to show the status as “settled.” If not, then you should follow up and request that they update your credit file to reflect the settlement having been paid per your agreement.

  21. I talked to American Express today and they said that effective March 2012, they are no longer offering settlements to any of their accounts. They essentially said that my only options are to either take one of their alternate payment options or file bankruptcy. Is there anyway to confirm that they are no longer offering any settlement plans? They said that even once it goes to collections, the collections company will not be able to offer us a settlement.

    • Taylor, if they told you that effective March 2012 they were no longer accepting settlements, that is simply not true. There were numerous settlements during 2012 with this creditor, through early December 2012. What has happened recently is that Amex was fined by the Consumer Financial Protection Bureau, and some of the penalty had to do with illegal collection practices on credit card accounts. My take is that they have suspended settlement activity until they audit their procedures and policies and get their act together. As I noted in a comment above, it is virtually impossible for any major creditor to take a “no settlements ever” policy and stick to it for long. I’ve seen it attempted time and time again, and the creditor always returns to settlements sooner or later anyway.

  22. I have two American Express business accounts totalling about $21,000 combined. One is current, the other is due Tuesday in full. These accounts must be paid in full every month. My business took a downturn last year and I can not pay the balance in full on Tuesday. Can I close these accounts and negotiate a repayment plan with American Express, especially since these accounts are the type you must pay in full each month. I know based on my current business cash flow that there is no way I will be able to pay either of these accounts in full. Thank you in advance for your input. As of today, I am still current but as of January 22nd, I will not be able to pay the second account. Once I miss that payment, American Express will suspend my charging.

    • Karen, I would certainly reach out and discuss the situation, see what they offer you, etc. The initial response is usually that they want full payment no matter what, but some of it will depend on the long-term history of the accounts. The usual path is that they insist on full repayment, and when you fail to do so, they assign the file to a collection agency within 30-60 days. However, it’s usually possible to eventually negotiate a long-term payoff option over 12 months.

  23. I had several AMEX accounts that were for the business I own. One was the Platinum card that you pay the balance each month and the other was a minimum each month. I carried large balances on the cards each month because of the nature of my business. There were times that I paid the balances down or off during the month to keep my charging ability. Now comes the zinger…my company did a large amount of work during Katrina and Rita which caused a DIFF score trigger at the IRS. So, of course, I got audited. There were enormous consequences to the audit. The original examiner made a HUGE mistake and i have only just now come to an agreement with the IRS after fighting to have the original audit reopened. As a result of this, the IRS placed a tax lien on my home and as soon as that showed up on my credit report, AMEX wanted full payment, to which i, of course, could not pay. Things went tumbling downhill and they now have a judgement against me. I am making arrangement to settle with the IRS and would love to clear up the judgement against me with AMEX. What would you think are my odds of offering a lump sum settlement and have the judgements released? I owe approximately 40,000.

    • Rick, it is possible to settle judgments after the fact, but unfortunately, you have very little leverage once they obtain a court judgment and have a clear path to recovery via levy, lien, or garnishment. So judgment settlements in general tend to be on the high side. If you cannot reach agreement on a lump-sum settlement figure that is workable for you, it may still be possible to negotiate a stipulated payment arrangement over several years, and that would at least help you avoid surprises like a wage garnishment.

  24. Charles, I had a gold amex card in 2000 and defaulted on 5000 usd, I am trying to get a new card with amex however I am worried that the original debt from over 13 years ago may comeback to haunt me, am I being over paranoid.

    • Colin, your question is actually very well timed. You are not being paranoid. For many years, American Express was notorious for carrying an internal record of any balances forgiven in settlements, and then requiring people to first pay back previously canceled balances before considering any new application for credit. This was true no matter how many years had lapsed since the original event. So had you applied for new credit with Amex last summer, you would have been denied unless you were willing to pay back the $5,000 default from 13 years ago. However, during the financial crisis of 2008, American Express converted to a bank (versus a financial services company), and became subject to banking regulations. In October 2012, Amex was fined $85 million by the Consumer Financial Protection Bureau for (among other things) discriminating against new applicants who had settled previously, even when their overall credit would otherwise have resulted in approval. So it should be possible now to apply again with this creditor, and if you are otherwise creditworthy, they cannot hold you hostage for repayment of this 13-year-old matter.

  25. Charles,

    I have 2 Amex card, a personal platinum in great standing and my employer corporate Amex whom I am still employed by. The corporate card was cancelled and relplaced by visa but an old recurring bill showed up on my Amex which I thought was resolved but wasn’t. It went into collections and shoes up on my credit report. My company has tried to contact both Amex and the agency to clear up the matter but it been difficult to get them to send document to validate the debt so my company can pay it. They are will to send a officer signed document Amex stating the will handle the debt and it should be removed from my credit report. Platinum reps says that based on my history I should right a letter to Amex platinum so they can work with the corporate team to resolve and include the letter from my company. It for all of $450. What do you think? REJ

    • Rej708, for once I actually agree with what the reps are advising. :-) Given that you have a personal platinum account in good standing, and that this matter is actually just an error on the part of Amex, I agree that a letter of explanation to Amex makes sense, and that you should include your corporate letter as well. Another option, which you can actually do at the same time, is to write to the three major credit reporting bureaus with a dispute on the accuracy of the negative item. I recommend you file such disputes in writing, rather than via the online disputing system.

  26. I have (2) AMEX Cards, Gold and Zync, Gold card Balance 25,000 Zync 15,000.. I am currently 2 months late on Zync and not late on Gold Card Yet. I will not be able to afford to pay the cards off in full currently with my financial status.
    I spoke to AMEX and they offered me a hardship program which is 6months zero interest and 6months at 9.99 but they want 900 and 1200 each month for the accounts..
    I am hoping to save up the next 2-3 months maybe 6000 and try to settle the Zync card at 50%.. and then try a settlement for the Gold Card. Is that a better route then hardship? I asked for a settlement but the agent said they do not offer those at this time. 2100 a month will be tough but do able.
    How quickly is AMEX to file suit against me? Will they send a judgement? I have never been in this situation before.. Worried they will try to sue me, I am willing to pay at settlement or worst case hardship..

    • Andrew, what you are essentially asking me here is to provide a detailed set of instructions on how to proceed. That is simply not possible via a short blog response, sorry. I don’t know enough about your situation to make a recommendation. Please feel free to request the 20-minute phone consultation, thank you.

  27. Thank you for the informative article on negotiating debt w/ Amex. I had never negotiated a debt but learned the hard way i did not get a letter in just have one ?,writing of our original agreement which turned out to be a big mistake.
    I am currently in a pickle with them myself and have a year old account in litigation with them. It would of been settled last fall however when I went to do the ACH settlement by phone their collection company pulled a ” our client has ended negotiations at this time” card on me. So I ignored the debt as it progressed into litigation. I have since was told by an advisor to call on more time which I recently have done. My ? Is how likely are they to deal or do they ever once the debt goes into litigation? ( when I called recently and talked to their collector they told me this time that their client has “lifted the non negotiation policy” ) this being said they are very non communicative so far as far as my newly submitted offer and it is hard to get their collector on the phone. Thanks !

    • Sunrise, it depends on how far into litigation the case has progressed. Settlements are possible even after a judgment has been entered against you, but the farther into the process the case goes, the higher the percentage is likely to be on the settlement.

  28. Have a Gold AMEX since 2004 never late.I paid $1,300 on this months $5,000 bill now I am late. I called and ask if I could pay over time they asked why.
    I did not want to tell them that my wife left with all my cash and her last charge was a rental car(I got her a card with my account that I have to close) and I am broke So I said I would call back.
    I have a 720 credit score and a good job. I owe them $4,000 and can pay a few hundred every week.I do not know what to do. I will not press charges against her..any advice?

    • Charles, sorry to hear about your situation. FYI, the top three causes for financial hardship are loss of income, medical problems, and marital issues. If you wish to maintain your long-term relationship with Amex, and otherwise do not have other problematic debt accounts, then your best bet is to work with the creditor. It’s fine to tell them you are going through a separation or divorce, without going into the intimate details. Just say that you have more going out than coming in right now, due to this situation, and since you have been a good client for nearly a decade, you could really use their help with a payment program until you can get back on your feet.

  29. Charles, I have a personal blue amex with a balance of $14,000 – I have been paying steadily over the past 7-8 years (down from $22k) I closed this account about 5 years ago. I also have an $8k balance on a blue for business amex. (which is open). I closed the business in 2010. I have been paying regularly since. This is not showing up on my credit score. Can I negiotiate with Amex? am I liable for this amount?

    • Matthew, yes, you are still liable even though the business was closed. I’m assuming Amex required a personal guarantee, as it would be a very rare situation otherwise. So the liability passes through to you on the strength of the personal guarantee, not the status of the business. Yes, you can negotiate this type of balance.

  30. Hi Charles,
    my question I have had an American Express green card for 14 years that was always paid on time & in full, my business right now is not doing well & I am not able to meet the full card payment,since 2/1/13 my balance is $9000.00 I have made payments of $l400.00 since 2/1/13,They wanted me to go on the hardship program & deduct $750.00 out of my checking account a month for 1 year & still report my credit I now do not want to enter this program & want to know if I pay them between $250.00 -$500.00 a month will they sue or accept this offer. I really am not able to pay more than this due to my business right. How do I handle this with American Express,I also am having a lawyer send them a letter in reference to the offer, please advise.

    • Jan, if you have retained an attorney to assist you, then I suggest you follow your attorney’s advice rather than seeking alternate answers via a public blog. But generally speaking, Amex is usually willing to work with customers on payment options, and their first hardship payment offer is not necessarily the lowest monthly payment they will accept.

  31. Amex turned over my 9,300 balance fo GC services. The only settlement they offered was 75%. How long before Amex takes the account back from GC services? 90 days? then will i have a better chance of settlement? I offered $4000 and that was refused. Why would Amex refuse this offer rather than getting nothing after bankruptcy?

    • Payul, your offer was reasonable, so keep negotiating. I can’t provide detailed instructions in a blog reply, sorry. If you want help, then please order one of my program packages.

  32. Hi Charles

    I have three AMEX cards – green, costco, and blue. I use the green for a lot of monthly bills and pay off ever month. I rarely use the costco card, but I have a $27K bal on the blue card. While I have been making min payments all the while on the blue, my income is down and now I am finding to very difficut to continue to eveb make the min payments on the blue card. I wanted to know if it would be a good idea to contact AMEX and request that they close my Blue card and lower my monthly min. payments. I just went through loan mods (successfully I might add) on three properties (home and 2 rentals) which has trashed my credit. The reason I never stopped paying my credit card bills is that I do not want to lose my green card – but I may not have a choice at this point. Any suggestions on how I should proceed? Thanks Chris

    • Chris, if you will no longer be able to sustain payments on these accounts, then it’s never a good idea to just ignore a creditor. I certainly don’t know enough about your situation to make a recommendation one way or the other on whether debt settlement would be a good fit for you. But if you already know you won’t be able to continue payments, then it’s best to be proactive in trying to work things out with Amex. They can be very aggressive on larger balances like the $27k account, so the logical first move is to discuss your situation and see what they will offer in terms of a longer-term hardship plan arrangement.

  33. I had a business platinum card with a balance in November of 2011 of $467,543.17. I have been on a program with Amex to make payments of $15,180 and I did that for about a year. My balance now stands at $256,750.00. I have been in constant communication with Amex and their telling me that I need to make payments of $26,700 a month in order for my account not be sent over to a collection agency. I know that I can pay this balance off in 2 Years. What will happen if they send me to a collection agency. Can I work a payment program with them?

    • Dave, it’s often possible to negotiate payment arrangements with outside agencies, but it depends on the agency in question, as well as the status of the account at the time of assignment (pre or post charge-off). Keep negotiating. The creditor is really just trying to get paid, and even if this escalates to legal action, it’s often still possible to negotiate a 2-3 year payoff option to avoid a judgment action against you.

  34. I have a $55K AMEX balance that I am paying through a 12-month payment plan at $2,700 a month. I am a few months into it and it is becoming apparent to me that I cannot keep up. I want to pay off this debt but I need a lower monthly amount over a longer time horizon. How do I get them to adjust the payment term out over 2-3 years?

    • Doug, all you can do is talk to them and try to work it out. Normally they don’t stretch that far on payment programs (for the types of accounts that are supposed to be paid in full every month), but it might be possible to continue working directly with them on a revised payment arrangement. But most likely, the account will go into default when you start missing the $2,700 payments and get sent to an outside agency. It’s actually easier in some cases to work out longer-term payment arrangements with third-party agencies (as they are trying to take their cut), but you do need to understand that this would entail some damage to your credit.

  35. Charles,

    I had a corporate AMEX card through my previous employer. We parted on unfriendly terms back in October 2012, and as retaliation they stuck me with a $1400 balance on the card. I believe it was personal guarantee since AMEX pulled my credit when I received the card. It is now reporting on all 3 credit bureaus as a derrogatory account. I called AMEX this afternoon and they said the only way to remove it from my credit is to have the employer submit a “letter of liability” on company letterhead. I explained that I don’t see that happening, but they said that it was the only way. The account is apparently past the 180 day mark, so my question is what should I do to try and get them to remove the marks on my credit? If it comes down to it I would be willing to negotiate payment, but I’d like some advice on the best way to go about this.

    • Chris, my first thought here is that you should consult with a good employment attorney. If you have a valid claim against your former employer for the way they handled this account, it may be that you can shift responsibility back to the company. That would be the cleanest path to getting this resolved, with the “letter of liability” American Express is requesting from you. Otherwise, if you handle this strictly as your personal responsibility, there will be no way to get the tradeline removed entirely. It’s there on your report because you personally guaranteed the account. The best you could do would be to pay it, but then it would show as a paid charge-off, with the negative history still there. The negative effect will fade over time, but still be visible up to 7 years.

  36. Dear Charles,

    I left USA Feb 2012, i have 2 credit cards from AMEX (Blue and Delta Gold), one student credit card from Bank of America, and 2 from Chase.
    I have not paid any of the balances on all of them.
    I just checked online and found that:
    1. Amex cards have been canceled and there’s a balance of $760 on the Gold and Zero balance on the blue.
    2. Chase cards have been canceled and i could not know the balance on all of them!!
    3. I could not find the Bank of America’s credit card on my online account, neither i could add it (i thins it’s still active).

    Now, what’s my status? and What should i do in order to settle the balances on all of them and keep my record clean while paying as little as i can to settle them.

    Thanks in advance for your help.

    • Saleh, if you have not paid on these credit card accounts since you left the USA more than a year ago, they have all gone past charge-off and are in collections. It’s too late to “keep your record clean” if you have not paid in all this time, but settlements are usually possible. I can’t possibly provide you with detailed instructions in a brief blog reply. You should order one of my training & coaching packages to get the help and support you need to settle these claims. If you are overseas, you’ll need to get in touch with me by email to place the order, as my shopping cart will only accept USA based addresses.

  37. Dear Charles –

    I have had an American Express Business Management Account for more than 10 years. The card is in my former business name. In 2011 I closed this business due to declining sales and have been unable to make payments on the account ever since. The total debt is $9,500. I received a Civil Action Hearing Notice made out to me personally (no mention of the business). The original hearing date was set for April 2nd. Prior to that date, I submitted notice that I intend to defend. A new hearing date has been set for April 23rd. What are my options? What are my rights? NB: the attorney in this case is located in my same state.

    Thank you in advance for your advice.

    • Lori, you can still try to negotiate a lump-sum settlement, even after a lawsuit has been filed against you. If you do not have sufficient financial resources to work out a settlement, then another option is to negotiate a fresh payment arrangement over time on the full balance. This is normally possible, as the creditor is simply trying to get paid, and sometimes they will agree to stretch out the repayment plan over 2-3 years.

  38. What is the address to send the settlement offer to AMEX? I had a $7400 offer.. no phone contact.. no letters.. its 3 months past due… Reason for delinquency is Cancer. Attorney wants me to file a CH13 but i don’t want to do that..

    • John, please note that I said nothing in the above article about mailing a settlement offer letter. That is a very ineffective approach to negotiation of a settlement. Just call the 800 number on your card or statement and you’ll be routed to whatever collection department has the account. Negotiate by phone, and when you reach an acceptable figure, then ask for a settlement letter to be faxed to you before you pay.

  39. Hello Charles,

    I currently have a Amex Zync card that has a balance of $40K on it due to certain decisions I thought would would work financially but did not. I am currently working a steady job but am not able to pay off the balance in full. The account is now 2 months late and Amex has sent me a letter stating that I will be reported as delinquent to credit reporting agencies after two consecutive billing cycles. I was wondering what options would be best for me to take? Should I contact Amex and ask for a payment plan or do I let it the account sit? I’m afraid if I get on a payment plan the monthly amounts would be too much for me to be able to handle. I’m not looking to really keep my relationship with Amex after this, but I also am worried about my credit. I know it will damage it, but my primary goal is minimize it as much as possible. Thoughts?

    • Justin, I can confirm that Amex has a tendency to sue over this size balance, rather than just allowing the account to sit unpaid indefinitely. A settlement is possible, but you would need to have access to funds as a lump-sum, in order to be in a position to settle quickly enough to avoid a legal judgment against you. So a payment option is probably your best bet, as this would also minimize impact to your credit. Call your creditor, explain the situation, and see what options they offer you directly, before you do anything drastic. I also recommend that you get advice from a bankruptcy attorney — it’s always a good idea to understand what “Plan B” might look like, even if you don’t want to go that route. If you feel that settlement will work for you, then feel free to get in touch with me by email and we’ll get you going with some training and coaching support.

  40. Charles,

    I have 3 Amex accounts that are on 2 separate businesses , Platinum $425,000- Platinum $15,000 and Blue Revolving $15,000. There all tied to my SS number and will be due tomorrow. The vendor I was using to run the business charges through on these cards has elected not to take Amex anymore which has left me with no way to pay off the balances in full. The good news is I can afford to make reasonable payments on the balance. I wanted to call when or before the card is due because if not paid on that date they will be officially 30 days in arrears. I would like to get out of this with my credit score unscathed, any chance ?

    • Donald, it will depend on what you are able to pay per month compared to what Amex is asking for. Given that you have the ability to make payments, and also that your priority is to preserve good credit, then I agree you should call the creditor before the payments go into arrears. Take the proactive approach. To avoid impact to credit score, it would be necessary to enter a payment program that will still show the account reporting in current standing. The main challenge will be that Amex will be asking for the balance to be paid off very quickly, rather than stretched out over a period of years. So again it will depend on what you can commit to per month.

  41. Charles,
    Thank You, according to some of the posts that I have read here and your recent advice, it seems logical and probable. You and your ZipDebt blog have been very helpful.

    I will keep you posted on the outcome. Don

  42. Due to severe financial hardship and loss of employment, my husband and I have three AMEX accounts that are in default. One has just been moved from GC Services to a collection agency. I am currently in negotiation w/them for a settlement. The other two are in route to a local attorney who said that once they were received in her office, she might have to file a lawsuit against us if AMEX requests it. We live in PA and are in forced retirement, do they have to try to recover the money before filing a suit? Is it a time for negotiation?

    • Katie, the short answer is “yes,” it’s time to negotiate. I’m not quite sure what you mean by the question on whether they have to “try to recover the money before filing a suit.” The filing of a lawsuit is itself an attempt to recover the unpaid balance. If you meant, do they need to use non-lawsuit methods of attempting to collect, like simply calling you for a certain period of time, etc., that’s not the case at all. They have the right to sue you in civil court to recover what they can from you via a judgment. If you want coaching assistance, please feel free to order one of my training/coaching programs. Without professional guidance, you’re likely to wind up with a higher settlement percentage than would otherwise be possible.

  43. I have 2 cards one is Amx credit card 13,000$ and Charge card 29,000$ i have lost a lot of $ due to the down turn of the economy. The account now is Charge off for 3 months now for both accounts. I have not been responding their phone calls or their mails for almost a year since i couldn’t afford to pay even $1. I just checked my credit report and i see a CO on both accounts what should i do? I don’t want to be sued by creditors but again i have nothing for them to sue either since i am not a perminate resident or a citizen of the US. I can probably pay them 300$ a month for right now.

    • Canon, just ignoring the creditor is not going to solve your problem. You need to be proactive and try to work things out, or you risk a lawsuit against you. It’s never a good idea to allow a judgment against you, even if you think you are “safe” from any consequences of it. If you are in a serious financial hardship situation, to the extent you haven’t been able to pay anything this whole time, then it would be a good idea to consult with a local bankruptcy attorney about that option. If bankruptcy is not recommended or not available in your case, then you can think in terms of negotiating settlements instead. Just be aware that a settlement will require that you have access to sufficient funds to make offers. Otherwise, your best bet is to negotiate a long-term payment arrangement that is within your means.

  44. I owe AX on a Gold Card 14K. In Jan 2012 they offered me an installment plan on purchases over $100. In August 2012, I made purchases all over 100 totaling 12K. They refused to honor the installment plan stating that they sent me a letter re this. Not being able to pay the 12K upfront they sent the account to Zwicker for collection. I told them same story to no avail. Yesterday, I received a call from Nationwide Credit stating they were now handling account. I owe 27K with 10 other credit card companies which are all current. The best i CAN DO WITH AX IS 400 MONTH WHICH IS MORE THAN I WOULD BE REQUIRED TO PAY UNDER THE INSTALLMENT PROGRAM. BEFORE SENDING TO COLLECTION CO THEY TOLD ME THAT WAS UNACCEPTABLE. I’M A 69 YEAR DISABLED VET ON A FIXED INCOME. MY HOME IS ONLY WORTH WHAT I OWE DUE TO A REFI. ANY THOUGHTS ON HOW TO HANDLE THIS

    • Robert, if your aim was to settle the account for a discounted lump-sum, then it’s often possible to negotiate settlements with agencies like Nationwide. But this would require a lump sum to settle with, which doesn’t sound feasible based on your financial circumstances. The agency’s job is to collect what they can, so $400/month payments would probably be very do-able on a $14k balance, as this would be around a 3-year payoff duration. You can just call the agency and ask what hardship program options they have available, but be sure to take your time and don’t commit unless you are certain you can perform. Also, given your age and disability situation, with more than $40k of CC debt across 10+ accounts (including this one with Amex), I recommend that you consult with a bankruptcy attorney. It sounds like you are in a precarious situation, so it’s wise to at least *evaluate* what the bankruptcy protection would look like, in case you are forced to it via non-cooperation by your creditors.

  45. I also had a corporate AMX Card with my company’s name on it. There was $1200 balance on it when I lost my job in 1/2012. I never requested or signed any paperwork for an AMX. I am not sure if I am liable (I have had a corporate AMX before where I was personally liable but I filled out the application). All of the charges are unquestionably for their business purpose only. I know that I need to address this problem as the card has gone from AMX to NCO to NCI collection in the past year. Due the way my employment ended I have had no contact with the company (It is very small 250 employees). I requested an accommodation for a disability because of MS and 90 days later I was out of a job and then became very ill due to the stress. I will not pay for charges that were for the company’s business and since I have not regained employment it would be impossible for me to do so at this time. I am wondering who is liable for this AMX and how I find out at this point and what is the best way to start to clean up this mess.

    • Chris, I’m sorry to hear about your difficult situation. With Amex corporate cards, there is almost always a personal liability involved. However, it’s possible that you are not liable, especially since the charges were all business related for your employer. I normally do not recommend the validation tactic when dealing with an account still owned by the original creditor, especially Amex (readers other than Chris be warned!), but in your case there seems to be enough doubt to form a valid basis for disputing your liability. The notices from agencies like NCO or NCI carry the 30-day dispute provision of the FDCPA. Next time you get a notice like this, and within 30 days of the collection assignment, send a request for verification of the debt via certified mail. Request copies of the original credit agreement you allegedly signed, etc. See what they come up with. If there is no agreement, then you have grounds for getting them to stop trying to collect from you.

  46. Thank you Charles for your quick response. I will send the certified letter to NCI as I just got their letter in the mail a few days ago. I have heard they are difficult to deal with, their person calls with the kids or tv in the background from a cell phone (I have not spoken to them). My other thought was to eventually hire a lawyer to deal with my former company to get them to reimburse the outstanding charges. They are not a bad company overall they just made a big mistake.
    Thank you again for the great information.

  47. Thanks Charles for giving us extremely valuable info.

    I owe 23K on an Amex Business Gold card. I was offered a 12 month payment plan with 3 months at 1% and the remainder at 9.99%. I can only pay $500 for now, hopefully more when my business picks up. I’m currently on 5-yr plans to repay credit cards from Citibank and Chase, with interest rates of 0% and 2% respectively. That is the only account on which I am delinquent.

    Questions:
    1. Are those payment modalities (time/interest rates) something Amex will consider, if now now, once the account is 90/180 days old?

    2. I have another Amex (Blue) with a $1500 balance. The account has been in good standing but was recently suspended b/c of the other delinquent account. Should I continue paying this account and save the money for a possible combined payment plan or settlement.

    Because of where I live, filing for bankruptcy is not an option. Preserving my credit is low on my priorities at this point.

    Finally–how do we get in touch with to set up that 20 min phone call.

    Thanks!

    • Sebastian, Amex does not usually offer 0% balance payoff options as some other creditors do. Once most Amex accounts hit 90 days late, they go to outside collection firms, which don’t want to do long-term arrangements if it can be avoided. Settlement does become an option between 90-180 late (and beyond), but it’s crucial that clients be able to muster sufficient resources to settle promptly, and before litigation gets going. On the smaller balance, which way to go (payments over time vs. settlement) depends on what you do with the larger account. If your goal is to preserve the relationship with this creditor, then payments are really the only option. Otherwise, when aiming to settle on one card, we usually go “all in” for that creditor.

      Regarding the 20-minute consultation, the link is above right near the top of this web page, or just click here. I should clarify that I only offer the 20-minute consultation for those who wish to settle and have questions about the process. I don’t offer free consults for the purpose of negotiating full-balance payment arrangements, as this is outside the scope of my program itself.

  48. Hi Charles, thank you so much for all the information. My question was in regards to once the A.E. card has been referred to an attorney’s office are they willing to do a monthly payment plan or just settling? We are unable to do a large payment at this time so would be unable to settle. Thanks.

    • Mike, if you don’t have funds for a settlement, then most of the law firms will accept payment arrangements on the full balance over time. If you have already been sued, this would be called a “stipulation for judgment,” since you’re agreeing to a judgment if you default on the new payment agreement.

  49. Hi Charles,

    I had two personal AMEX (the Blue and the Delta Sky Miles) cards, both of which I settled. With the Delta card, I settled for less than half the balance and the account was closed. With the Blue card, I agreed to pay a certain amount in exchange for “keeping a relationship” with American Express. They then gave me an Optima card with a very low credit line. Fast forward several years later and I have improved my credit, yet I can get very little in the way of answers from AMEX and they will not increase my line of credit despite a cleaned up report and higher income. Is my relationship with them ruined? How do I go about getting a new/different card with them in the future? Any advice would be appreciated. Thanks!

    • Matt, my first thought is that there are thousands of banks out there — you can shop for other credit offers via http://www.cardratings.com or http://www.bankrate.com. Part of the problem with Amex is that they used to retain in internal record of any forgiven balance. Consumers applying later for new credit with them were first required to pay off that old balance. In 2012, Amex was fined by the CFPB for a variety of violations. My understanding is that this issue was one of the things that got them in hot water. Try going in writing to Amex with your request for an increased credit limit. If you don’t get a response at all, then it may be appropriate to file a complaint with the CFPB.

  50. I have three Amex accounts and all are over 60 days late. I applied for them as primary but my ex husband has been paying on them and can’t keep up. Even though, in California, it’s community debt, those accounts are reported on my credit report only. His is clean as a whistle. One account has been referred to a law firm in my state but I haven’t been served. How should I negotiate these accounts? One at a time or call Amex and try to talk about all three? Once a law firm is involved can I get a principle reduction? Thanks for your help. Your article was very informative.

    • Elaine, it’s difficult for me to provide enough information in a short blog reply to instruct you on how to go about negotiating settlements. After all, I do have a training course on this subject that includes nearly 8 hours of audio material! But I can tell you that if Amex has assigned one account to a law firm, then you’ll need to negotiate with the law firm. If the other two have been assigned to different agencies, you’ll have to take those separately as well. If they are both still in-house at Amex, then you can try talking with them directly on those two. Yes, it’s often possible to negotiate a reduction via settlement even when a law firm is involved. If you want help, then please consider ordering one of my training & coaching packages so you get professional support along the way.

  51. Charles,
    I have an aMEX Green card account that is >200 days past due. I am not working and am unabel to make any payment at this time. I spoke to AMEX today to determine my options hoping that they would offer to settle. To my shagrin, I was told that they will not settle and that I must pay teh past due amount and subsequent monthly payments in order to “avoid escalation of the collection process”. I have never received correspondence nor calls from any agency other than AMEX. Based on my reading of this blog, its seems that maybe they decided to play hardball as an initial strategy. Have you heard that AMEX will refuse to settle a past due personal account? Thanks for your help. I look forward to hearing your thoughts.

    • Kevin, it’s very common for creditors (especially this one!) to say they are unwilling to settle a past-due account, or “no settlement is available on this account,” etc. That is typically just an initial position intended to discourage you from the idea of settlement. The reality is that very few Amex accounts get settled directly with them. They seem to prefer to handle all their settlements through outside collection agencies. At 200 days late, it’s probably still in their recovery department, which is very difficult to deal with, and will eventually be moved to to an agency where you can discuss a settlement. It could also go to a law firm, but even then it’s usually possible to work out a settlement.

  52. Charles,
    We have a little over $18k on an AMEX Gold Business card that we are current on. We have not charged one thing to the account in over a year! Our business was upside-down and we recently sold it for less than our debt. I am current on payments, but would like to settle for a lesser amount so that I can pay off the balance. Any advice on how to go about doing this? We do not have the money to pay the full 18k.
    Thanks!

    • Kari, you won’t be able to settle an account that is paid current, only one that is in serious default and headed for charge-off. This will have a negative impact on your credit score, which you may or may not be able to tolerate given everything else going in your financial world. I really can’t provide advice and negotiation instructions in a short blog reply. If you feel that settlement is your best option, then please order my program and get some training and coaching before you proceed.

  53. Charles,

    I currently have an ~30K balance with AMEX. I have been paying 250/month (acct closed 0% interest) for about 2.5 years now after going quite some time w/o paying anything. The past few times I have “checked in” with them (setting up more payments), I have been offered settlement terms of about 2500.00 lump sum. Does this sound legitimate? I can certainly gather the funds to get rid of that much debt but it sounds too good to be true. Also, will the tax repercussions be devastating with 27K of cancelled debt? Obviously my credit is horrible so that is not one of my concerns – just wanting to get rid of this monthly payment.

    • Milton, a settlement of $2,500 on $30k would be 8.3%. I’m very skeptical, as this is extremely low, far below what Amex would normally accept. As with all settlements, you MUST have an agreement in writing before paying. So that is where the “rubber meets the road.” If they won’t document the settlement, then it’s not a legitimate offer, period. As to tax consequences, any forgiven amount will result in a 1099-C for treatment as ordinary income. There is an exemption if you are insolvent (i.e., negative net worth) at the time of settlement. See IRS Pub. 4681 for details on how to calculate insolvency.

  54. I have a $50K AMEX debt with a last payment made on 3/3/2013 so it is basically 120 days old. I just got a call from Jaffe & Asher looking to collect. Do I start discussions on settlement with them directly or do I go back to AMEX? I am not in position to pay the full amount back but can muster a reasonable lump sum payment right now.

    • Doug, once a creditor assigns an account to a third-party agency, they won’t speak directly with you anymore. So you will need to negotiate with Jaffe & Asher rather than Amex directly.

  55. I have a corporate amex that has been on a 12 month payment plan started at 45k my business has closed in june and i can not make the next payment of 4k i only have four payments to go and called them they said that they would stop the automatic draft but would not talk to me about making lower payments she said they would let it go to collections is that what i have to wait for or should i continue to call and push for a new payment plan

    • Paul, you may as well continue pushing for a new payment plan, but the reality is that this creditor is very uncooperative when someone falls off an existing hardship program. Amex is quick to move files to outside agencies, but it’s often possible to continue negotiating payoff options when that does occur. If it does shift to an agency, don’t be intimidated, and don’t assume their first offer will be their best and final for revised terms.

  56. My husband owes 10k to Amex. He is in the hardship program paying $190 a month, which we are not able to pay no more. We moved to CA where he was accepted into Medical school. Unfortunately due to sickness he dropped from medical school and has been unemployed for a while. He is planning to default this and his CITI card with a 6k balance. I am account manager for both accounts and have CC balances with both creditors. My question is will his default affect my CCS standing?. I am not planning to default on my debts as they are smaller and I work managing money so I can’t ruing my credit. Will me paying my debts with same creditors diminish my ability to settle his debt? We also own a house TX that we are renting. We are barely keeping our basic payments on. Could Amex or CITI go after our house in TX? Will we be assigned to a collection company from TX or CA? Are laws in CA very aggressive to debtors?

    • Natalie, if the cards your husband is defaulting on are actually your accounts, where he is an authorized user, then your own credit will definitely be impacted. If the accounts appear on both credit reports, then both scores will be affected. You can still settle his accounts without settling your own, but that would be problematic since your credit will still go negative anyway due to his default. TX is more friendly to consumers for collection law vs. CA. The creditors cannot make you sell the TX property, but they could obtain a judgment eventually and attach a lien to the rental property.

  57. My husband was an additional cardholder to an AMEX under my name. I am already He managed to put $92K. We are going through divorce and finally in the our divorce settlement he agreed to pay this debt. He was supposed to pay to Amex 7/15.
    However, I am already past due 90 days in my account. I had received a letter from Amex notifying me that since I have not responded to their calls, they were going to send my account to a collections lawyer ( I had until 7/13) to contact them. I still haven’t contacted Amex because my husband said that he will pay by July 22nd. Since the date my payment was late for 1 day, Amex had called daily but they stopped calling since 7/13 (which would make the date that they set for me to contact them or send my account to the lawyer). Should I contact them and let them know that I’m still waiting for the additional card holder to make the payment and he is supposed to make it 7/22? or wait until 7/22 and if my husband doesn’t make the payment THEN call Amex?

    Thanks

    • Gaby, I do think it makes sense for you to call them now, rather than waiting until 7/22. They won’t care about the terms of your divorce agreement, but if they believe the account will be paid current by 7/22, then they might be able to hold it back from being assigned to a collection law firm. If it’s already been assigned, then your ex will need to work with the assigned agency to catch up the account.

  58. Hi… When opening up a second checking account solely for the purpose of settling several credit cards via ACH transaction, what’s to stop a particular collector from coming back to this second account at a later date in order to take out more money (e.g. let’s say I settle with one initial collector, and they have ACH’ed the funds to settle the account. Then at a later date I deposit more funds for a different settlement. Couldn’t the initial collector just snatch up the money before the new collector has a chance to ACH their settlement? Will some collectors refuse FedExed money orders, or could I convince them that this is the only way they will be paid? Thx for your help.

    • Brad, payment via FedEx is acceptable to most agencies, even though they resist and prefer ACH instead. So it’s not so much a question of refusal as it is one of timing. In many cases, there is a last minute effect where you reach a verbal agreement, but they are wanting payment same day or next day, and the ACH method takes out any potential risk of your payment showing up late, etc. To your question, it’s very rare to see this where an agency would double-dip on a payment. The banking rules on electronic payment carry stiff penalties for this sort of violation. Usually when people encounter a problem of this sort, it’s usually because the agency slipped up and transacted the wrong amount due to a data entry. That can be fixed easily enough. I wouldn’t be too concerned about this issue. I can’t think of a single situation in recent years across thousands of settlements where a creditor or agency just went back into the account later on without permission.

  59. I have a $25k balance with AmEx that is 150 days past due. They just sent it to an attorney in my state almost two weeks ago, who says if it’s not paid in full in another two weeks, they will file a lawsuit. According to them, my only option is to pay in full immediately, or with terms over a 12 month period. They say the status with AmEx is that they will not accept a negotiated settlement – it must be paid in full, or it will go to a judge.

    What are my options?

    • David, your options are to continue haggling, or to cave in and agree to what they are asking. There really are no other options, aside of course from filing bankruptcy to discharge the obligation. The “no settlement” statement is a common opening position taken by the law firms working these accounts, but some type of discounted settlement is usually available even when they initially claim otherwise. They are not bluffing about legal action, so it may be necessary to “answer” the lawsuit once it has been served. Many Amex settlements only get negotiated as part of resolving an active legal claim.

  60. Hi … I have an account with AMEX and haven’t been able to pay in sometime. I recently received a letter stating that my account had been cancelled. The letter also states “The law limits how long a debt can be reported to a consumer reporting agency. Because of the age of the debt, we cannot report it to a consumer reporting agency. Payment or non-payment of this debt will not affect your credit score”. What is my best course of action here? Will AMEX try to collect the debt and what actions can they take?

    • Mike, if you received a letter with that language in it, it must mean the debt is older than the 7.5 year reporting period. Amex will continue to keep an internal record of the balance, so you won’t be able to obtain a new card with them in the future. Depending on the SOL period for your state, you may or may not be exposed to further collection action. If the SOL has already expired too, then there should be no further risk of litigation.

  61. I have received an “Execution on Money Judgment” with a docket number, from the state where I live. It is signed by a Clerk Magistrate and a Deputy Sheriff. This was for an Amex debt of $5K on which I have not made a payment since 2007, and now with fees, etc the execution totals over $8K. I do not own a home or car. Can the police come into my apartment and take property? Can they garnish my wages or place leins/levys on checking accounts? Can the take my IRA or 401K accounts? I’m scared and don’t know what to do next. Any advice is greatly appreciated.

    • Maria, the main risk to you now that there is a judgment is wage garnishment or a checking account levy. It’s technically possible that they would try to convert other personal property, but this is very rare. IRA or 401k funds are protected from creditors. The next logical step is to call the law firm that sued on behalf of Amex and try to work out a long-term payment arrangement you can sustain.

  62. I have an 8K payment due with Amex Gold Card. Was able to pay 6K this month. As I am on the road for the next 2 weeks, I can’t be without a card. What is best way for me to prevent them from turning me off?

    I can make my Amex payment but I will be late on my mortgage for first time. Which is worse?

    • Jerry, you should get on the phone with the creditor and explain what is going on. I would expect that they will leave the account active provided you commit to catching up the missing $2k before the next billing cycle rolls around. As to a default on Amex vs. a mortgage, that’s a difficult question to answer because everyone’s situation is different. It’s bad to miss a mortgage payment, but a single missed payment won’t trigger foreclosure and you can still catch up later on. I guess being in on the road without access to needed funds or credit would be worse! But I certainly would not skip a mortgage payment without first discussing the timeline with Amex directly.

  63. In an a post a couple years back you stated “there was an announcement today that the Consumer Financial Protection Bureau had fined Amex for insisting that old forgiven balances be repaid before a new credit application could be approved (even years after the original default). So we may see a policy change on this from Amex.”

    I have a charge off Amex account from 2002, so it is outside all SOL and dropped off my credit report in 2009. However, I do want to apply for an Amex. Do you know if they have changed the policy? Also, if I did agree to pay the balance back from 2002. Would the account appear back on my credit report to reflect as “settled” which would be negative and remain for 7 years? Is it possible to have Amex “reage” the account or negotiate in another fashion to get a new card?

    • James, I can’t say for sure whether Amex has changed its policy of maintaining an internal record of any previous written-off balance. I do still see some settlement letters that contain that language, but they are from third-party agencies and may be a carryover from before. Payment of a 2002 balance should not re-age the account, as the 7.5 year reporting period is supposed to date from the point of default, not settlement. Why don’t you simply call Amex and ask your question directly? You can find out easily enough by simply applying for a new card.

  64. Hello Charles,
    Very good explanations, i am impressed. So, i have a question. I live in london, UK And I have an amex gold card for about 1 and a half year now. Have always paid on time. But next month i will probably not pay it, or the first time. I am unemployed and, yet, managed to pay monthly figures of about £ 2.500 ( british pounds)for the last six months. ( same time i have been unemployed ). But my savings are no good now. My wife works so we have no other debit. Do you think i should call them and try to split my balance in order to pay it off? Is that possible? I have a great track record with them, and dont want to loose my card. Thank you so much in advance!

    • Leo, if you want to keep the card then you do have to be proactive. The problem is that once you make it clear you’re not able to pay as per the original agreement, they will set you up with a payoff plan (probably over 12 months), but then they will usually close the account to further credit usage. It may be possible, however, to get them to agree to reactivate the account once you are paid up again.

  65. I have a balance of 4000 owed to american express. I have had a difficult time paying off this debt. I was on a program with them for automatic deductions but it was only for 12 months. My husbands work is sporadic and I only work part time. I have a family member who could lend me some money. Would I be able to negotiate with amex or let it go to collections and have a better chance to negotiate with them for a payoff.

    • Diane, almost all settlements with Amex are negotiated with one of the outside collection agencies. You can try a direct settlement, but normally the file has to be past 90 days late and assigned out before you can get anywhere beyond discussing payment arrangements on the full balance.

  66. Charles, In 1991 I filed for bankruptcy following a divorce and my Amex balance of $3K was discharged. Since then I have completely restored my credit, 800+, and about 5 years ago I applied for an Amex card and was declined because of the outstanding balance from 1991. I’m interested in applying for the Delta Amex because I travel a great deal and my question is if I contact them to pay old balance will that open the door to them adding negatives to my credit report, i.e. settlement? Obviously, it was on my credit report until 1998. Your blog is terrific. Thank you.

    • Erica, another reader (James) just asked a similar question, see above. My understanding is that payoff of an old balance like this should *not* cause a fresh negative entry on your credit report. However, James followed up and noted that the Amex rep he directed this question to said there would indeed be a fresh entry. I believe Amex is not clear on its policy in this area — they were just fined last year by the CFPB, and one of the issues pertained to inappropriate collection recovery on debts previously discharged in bankruptcy. My advice is to call Amex and ask them directly what they current 2013 policy is on this matter. Better yet, ask for permission to record the phone call. You may also want to do further research on the CFPB fine against Amex for credit reporting issues like this one.

  67. Charles,
    I have debt of just over 20k on a business AmEx that I personally guaranteed. We were put in the hardship program when our business fell on hard times and work dried up. We were unable to maintain payments and it has progressed to where it is now with any attorney in my state. Will this attorney negotiate a lump sum settlement or long term payment plan? Also, once the balance or settlement is paid will the debt on my credit report show as
    “Settled” and will it continue to harm my credit? How would you recommend I proceed with dealing with the attorney? Making every effort to pay off this and other debts and get my life back in order. Thanks for your help.

    • Dan, once Amex assigns to a law firm in your state, they won’t speak directly with you any further. So you would really have no choice but to work with the law firm anyway. Yes, it’s often possible to reach a lump sum settlement with the law firm, and in fact many settlements with this creditor happen under such circumstances. Long-term payment options are also a definite possibility, depending on what resources you have to work with. Any settlement will entail credit damage, but it will show as settled assuming the creditor reports it correctly. Basically, you start by calling the law firm, explaining your situation, and making an offer. Beyond that, I really can’t provide detailed negotiation instructions via the blog. With $20k at stake, you should give some consideration to getting coaching support, the idea being to improve the outcome by boosting your confidence level.

  68. Thank you for the very informative article. I have a strange one for you. I had some pretty serious problems back in 1986. I paid everyone off as best I could but still had bad credit for about 14 years because of late payments to all of the creditors. But I thought I’d paid everyone even though it was all paid very late. Well, I had an American Express card at the time with a balance of about 800 dollars on it. I thought I’d paid them off but when I bought my home in 2007 the bank told me that the 10 dollars on my credit report for American Express was not a credit but a deficit! I had no idea I owed them 10 dollars! I asked them what I should do and the bank rep told me I shouldn’t worry about it because it was due to drop off of my credit report soon. Well, it’s now 2013 and I just got my latest copy of my credit report and it’s still there with a notation that it is scheduled to stay on my credit report until 2021. Apparently American Express is keeping this alive somehow. How do I address this? Because of my bad experiences back in the 1980’s and 1990’s living with bad credit I’m absolutely fanatical about maintaining good credit since then. What do I do? Pay them the 10 dollars? Ask them to forgive it? Please help!

    • Rick, the first thing I would consider is filing disputes with the three major reporting bureaus. If there has been literally no activity on this account this whole time, I don’t see why it would ‘re-age’ for another 7-year reporting period. Ask for it to be deleted, and file your disputes in writing rather than online. If that doesn’t work, I would write Amex directly and ask for an explanation. This creditor was fined in 2012 by the Consumer Financial Protection Bureau, and one of the key reasons was erroneous handling of credit reporting issues. So your “nuclear option” is a complaint to the CFPB, which will probably get swift attention.

  69. I have a corporate Amex card that i could not pay last year with a balance over $100k. My name does not appear on the card and i signed as president. Am i personally responsible for the debt or is it all corporate? I am the President of the company.

    • Chris, the only way to be 100% certain is to review whatever agreement you signed when you opened the account. However, it’s very rare to see this type of corporate Amex card without a personal guarantee being involved — your name does not need to appear on the account for you to be held liable personally.

  70. Hi Charles,
    First, would like to say that I think it’s just awful how Amex could be helped with the bail-out TARP act, yet when the American people are losing jobs and under financial hardship, they refuse to offer settlement unless your account is in default. I owe about $7900 on an Amex account that was shared with my mother, a little more than half the debt was hers when she passed away 2 years ago. I explained that to Amex and that mattered little. I did a 6 mo 0% interest and made payments as big as i could, often about $10 more than the min payment. Now that period is over and my interest is back at 12%, i am currently about 8 days late on my payment and they will probably put my interest back at 24%. I have asked to settle for 50% and they say they will not settle with current standing balances. (I don’t think that is right). I work part time, I am a single mom, I have a hard time coming up with payments and the cost of living is making it increasingly difficult, sometimes I have to choose berween paying Amex, and buying food. I have worked so very hard to get my credit score up over the years, is my only hope for a settlement to ruin my credit? If so, then i call shenanigans. Thanks for your time.

    • Rachel, I agree with your point of view on this. But the reality is that settlements don’t become available unless the account is in default. It’s just how the banks operate, period. If you are on-time with the account, no creditor will even consider a reasonable settlement. Most of the time, the account has to be at least 90-120 days late before you can discuss a settlement. Credit will come back later though, so most clients are surprised to find they do get back to pretty good credit standing within a couple of years of having completed the settlements.

  71. Much appreciated advice, Thank You Charles!

  72. Charles,

    I’ve had an amex card since ’06. All payments have been on time, recently had some bumps in the road with business. I missed two payments, and it was turned over to an outside collection company. I’ve worked out payment arrangements with them for 100% of the balance owed. However, the recent lates have dropped my credit 80 points and I’m trying to refi my house. Will Amex help in removing these lates??

    • David, no, sorry. Amex won’t help you clean up your credit by removing prior late entries. They simply don’t care, and technically speaking the late pay dings were accurate anyway. Don’t fall for any bogus credit repair schemes claiming that negative (yet accurate) entries can be removed.

  73. Thanks Charles,

    Yeah that’s frustrating. Due to being in the hospital, and a banking change happening at the same time. The payments were missed. Just got off the phone with them, and they couldn’t really do anything. I’m going to keep trying until they get a stalking injunction.

  74. Hi charles, been with Amex and had a premier reward card, a charge card. Last december spent $6000 but lost my job the same month. Amex put me in 12 months payment plan. I paid 4 months and then could not paid more. my account was cancelled in march and since no more payment plan. Now i got a job and would like to take care of that debt which went back up to $6140 because of late fees.I called amex and they want me to pay the full balance and they are telling me that any time this account will go to an external collector. I really want to make a payment on that debt but dont understand why they prefer to keep adding late fees instead of putting me in a payment plan

    • Chris, the problem is that Amex will usually only grant the 12-month payment plan once. When you miss again after agreeing to it, they show no mercy after that. This is why you’re not getting anywhere with them on a second attempt to set up payments. It’s normal for Amex to assign to an outside agency around 90 days late, and it might even be easier to set up a payment arrangement with an outside agency than Amex directly. Don’t be afraid of a collection agency. As long as they don’t send it to a law firm in your state, you can still usually work out payment arrangements or even negotiate a settlement on the account. And even when they do assign to a local law firm, those options are still available in one form or another.

  75. Hi Charles,

    A little over a month ago, Amex offered a 60% settlement on my debt. I did not have enough money to pay it so had to decline. I have scraped up enough to pay about 40% and called them to see if they would accept. They have since given the collection to an outside company who said that since the initial offer was declined, Amex will no longer settle again. They said they have no authority to settle and that if I do not begin monthly payments, the loan will never go away. Is that accurate? My debt is almost 6 months past due, does Amex no longer negotiate once they give the collection responsibility to another? Thanks

    Thanks

    • Ed, as I’ve noted elsewhere in my replies to other readers, almost all Amex settlements are negotiated via outside agencies. So no, it’s not true. It sounds like this particular agency is the problem, which can happen sometimes. Also, Amex itself is the problem because they are constantly sending mixed signals regarding settlement policies. Get in touch with me privately if you want a deeper review of the situation and some coaching.

  76. Hi Charles, I posted a question Oct 17, 2012..to follow up Amex is now suing me for 74k. The business owner is no longer in business and states he cant contributed anything to His debt. I’ve hired an attorney but my concern now is I work in Accounting for a bank so bankruptcy is something I can’t really do. However, I can’t survive with a judgement either. My question is applying for another job and when they run a background check I have one negative item on my credit report which happens to be a charge-off in the amount of 74k. How do I explain that to a potential employer? Do I add a consumer statement to my credit file? Would the lawsuit show up in a background check? I can barely pay my attorney so I don’t have the funds to settled this debt.

    • Nicole, a consumer statement added to your credit file is probably not going to be effective, and I generally recommend against doing this as it never seems to make any difference. If you resolve the situation before it becomes a judgment against you, then it would normally not be something that turned up in a background check, but of course it will also depend on how thorough the background check is, etc. A judgment will definitely be a matter of public record, so frankly I think you’d be better off admitting it up front. If you don’t have the financial resources to resolve the situation, then all you can do is damage control. I suggest you get a formal letter of explanation from the business owner that clearly indicates what happened, how the business was unable to cover this obligation, and how you were the one left with the damage due to the company being unable to honor its obligations. I think a proactive approach like that would be a better way of explaining in advance to a prospective employer what they will see. Also, I don’t quite agree with you that a bankruptcy would block you from any and all potential jobs in the accounting profession. It’s usually more of an issue for people actually managing money (i.e., an investment adviser, broker/dealer, etc.).

  77. Hello Charles,
    First of all thanks for this blog, is fantastic, great job!

    I’ll appreciate if you can help us with our situation.

    My husband and I we are trying to buy a house, but in 2008 he had a judgement with AMEX for 17K, still is a public record and it’s making very hard for us to move forward with a Mortgage approval.

    So, we need to call AMEX to some way cancel that amount and remove that public record.

    What do you recommend? Which do you think will be the minimum amount they will accept to remove that record?

    Thanks!!
    Marian

    • Marian, no creditor (especially Amex!) is going to “remove” a public record entry from your credit report. You can probably still settle the judgment, and 50% would be a typical outcome in this situation. That will get the tradeline updated to show that it’s been satisfied, and the balance will go to zero so no longer be counted as a debt you still owe. But the judgment is public record and there is no reversing that. Talk to your loan officer and see if a settlement resolution will help you clear the hurdle of getting a loan application approved.

  78. Hello Charles, I am 74 and now retired. Some years back I used a personal American Express card to help pay some company debts. The amount that I owed was in excess of $70,000. Approximately 5 years ago AX garnished a personal checking account in the amount of $1,100. That’s was the total amount in the account at that time. I obviously at this age do not have the means to settle the majority of the account. There were two different accounts. Both accounts now show closed on the reprts of the credit buraus. Do you suggest I call them to try to work out a payment plan as I couldnt afford to have then=m garnish my SSI checks as it is the only means that I currently have. Thank you taking time to read this memo.

    • Ron, if money was taken from your checking account that must mean you had a judgment against you. I assume the judgment appears on the public records section of your credit report. SSI income cannot be garnished for a debt collection judgment, so you don’t need to worry about a direct garnishment of your SSI checks. They could put a lien on any real estate you own, preventing you from having clear title if you sell or refinance. But the main risk continues to be a levy on checking account funds. If your only source of income into the account is SSI, get in touch with your bank to discuss filing paperwork with them to protect any cash in the account after the SSI checks are deposited. If you are living on SSI and the debt/judgment was $70,000, it’s very unlikely you could afford a payment arrangement that the creditor would agree to, so I don’t feel that should be your first choice. You should have a consultation with a bankruptcy attorney to determine whether you could discharge this debt under Chapter 7 bankruptcy.

  79. Hello,Charles, I stopped paying my amex card in 2008 . In 2008 it had a balance of $4000. I check my credit report in june 2013,but my balance is now $20,000. Is it due to the high interest that was compounded over the years and penalties? If so ,do i have to pay the interest a and penalties if i wanted to settle?Thank you,

    • Tom, yes, the balance will have inflated with late fees and interest. Settlements are normally negotiated against the balance at time of settlement. So in all probability, a settlement on $20k will yield a payout larger than the $4k original balance. You could, however, ask for an accounting as to how the creditor arrived at such a large figure — it does seem excessive even at 30% APR.

  80. Thank you, would filing for bankruptcy in CT,wipe that dept off?

    • Tom, debts are only discharged in full when you are eligible for Chapter 7 bankruptcy. Under Ch. 13, you still have to pay back a portion of the claimed balance. See a local CT attorney to determine which chapter you would have to file under.

  81. Hi Charles.

    I currently have a legitimate charge off on my credit report from American Express dated November 2010. I would like to present AMEX with a “pay to delete” offer where I will pay the full balance in exchange for the information deleted from the credit reporting agencies. Do you know if AMEX is amenable to these types of offers?

    • Karen, in a word, no, Amex is not amenable “pay for delete” offers. In fact, no major bank creditor is. It’s actually something of a myth floating around on the Internet, and usually promoted by people trying to sell “credit repair” services, etc. The only time I ever see paid deletions is on very old accounts past the Statute of Limitations, and it’s always for a separate entry added later by a debt purchaser.

  82. Charles,

    I had an American Express credit card (Delta Gold)that was charged off with a balance of approximately $20,000. I do not remember the exactly when my last payment was made. It was most likely in late 2008 or early 2009. After checking all three major credit reports today, I still cannot find anything relating to when the card first became delinquent. It has been bounced around to various collectors over the years (and it looks like multiple accounts when it is really only one). How can I find out when the seven year reporting limit is up without the risk of resetting any statute of limitations?

    • Sean, you appear to be confusing two different things. The 7-year reporting period has nothing to do with the Statute of Limitations for legal action by a creditor. The 7 years is just the period when a negative item stays on your credit report, and should then drop off. Most credit report versions include a drop-off date for negative entries. Depending on what state you reside in, the legal SOL period can vary anywhere from 3 years to 15 years, with most states being in the range of 4-6 years. The only way you would reset the SOL period is by making a payment.

  83. Hi Charles,

    Thanks in advance for your help. I have an Amex Gold Card which I owe 35k, 25k is past due 60 days, 10k is listed under Pay Over Time , and Amex Blue which I owe 12k on (This card is current and minimum paid accordingly). Obviously, both cards are frozen due to my deliquencey. I can not afford the Care program due to the 2k monthly payment.

    At this point I do not know what to do? From what I’m reading, it sounds like I should wait for a collection agency to call and then schedule payment arragnements, or hold on until a better offer comes around. I am willing to pay the balances I owe, just at an affordable monthly payment.

    I also have a Wells Credit Card current and paid accordingly. I eventually need to have solid credit, still hoping to purchase a home in the future.

    What would you suggest in this matter?

    • Michael, I can’t advise you what to do without knowing a lot more about your overall situation. The problem on these Amex accounts is that they set the payments on their “hardship” program so high, most people can’t make it work. When the account is approaching charge-off, or past charge-off, options usually develop for either lower payments (over a longer period), or lump-sum settlements. The solution may be bankruptcy, settlement, or a payment plan, depending on other financial factors. With $47k of debt to this one creditor alone, you’re in pretty deep. Virtually all of these solutions, short of paying per the original terms, will compromise your credit to one degree or another. So you presently have conflicting goals if you’re trying to preserve credit while unable to meet the contractual terms extended to you. It may be necessary to let go of your credit score for a while until you can resolve this via settlement or long-term payments.

  84. I have 3 AE corporate cards that where in my name for a corporation that I owned that closed in April of 2009. I recently received settlement offers that I can accept BUT they were in my name. I want to make the settlements in the corporation’s name for both tax and credit score reasons.
    1. Do you think AE will settle with the corporation and remove me personally from the credit boards? How do I state that request?
    2. The letters ask me to call 877-486-4966 before sending in the settlement offer. I have read on other sites that this is a debt collector and to not do business with them. How do I know if I’m really dealing with AE?

    • Chuck, I doubt Amex will do what you are asking. If you personally guaranteed the accounts and they are being reported to your credit file, then it’s very unlikely they will agree to remove any personal entries. You can certainly ask, but the track record for this creditor is non-cooperation on such issues. If you are in a state where the legal SOL period is short, and these are time-barred debts, you will have a better chance at achieving a “pay for deletion” settlement. The phone number you referenced usually appears on offer letters from Amex directly. I don’t know whether this routes to a third-party agency, but that’s not a problem if it does. Disregard any forum advice to “never do business with a debt collector.” That’s bunkum. Many many settlements are negotiated via 3rd party outfits, and it’s not a problem if you document it correctly. In fact, the vast majority of Amex settlements are negotiated via outside agencies.

  85. Charles,

    Amex closed my account with a $2,400 balance on it due to delinquent payments. Since the balance is not a tremendous amount and would take me less then a year to pay off in full, is it better to negotiate a settlement offer for a reduced payoff balance or to just make monthly payments until the account is paid off in full. What’s better for my credit score and/or history?

    • Peter, if you have the ability to pay off the balance, that would be a better outcome in terms of credit impact. A fully paid collection account will carry less damage than a settlement entry. Also, Amex is notorious for keeping an internal record of any forgiven balance (via settlement), so paying it in full would also leave the option open of seeking credit with them again in the future.

  86. Thanks! I appreciate your help! Your site was very helpful.

  87. Charles,
    1. The issue of whether the corporate accounts are guaranteed personally is a debatable issue. In my opinion I never signed anything to that effect. AE says it was in the fine print.
    2. The debt was accumulated in a state with a SOL of 7 years. However, I now live in a 3 year SOL state. Which SOL would be used?

    • Chuck, you should consult with an attorney on these issues, but my opinion is that you won’t get anywhere debating the personal guarantee. Use of the card equates to acceptance of the terms stated in the agreement. As to the SOL issue, my understanding is that creditors have the option of bringing suit either in the jurisdiction where the card was originally issued, or in the jurisdiction of current residence. Obviously, in your case they would opt for the 7-year SOL. That said, SOL is a tricky area, and the rules can vary by state. I recommend you seek local legal advice to be sure.

  88. Hello, I owe Amex a small balance just under 1,800; i’m not behind,but i’ve been paying on this for over 7 years. I have a lump amt I could pay them, 1,200 I called them to see if they would accect this as a final paymnt paid in full, however they will not budge. Do you think there’s any point in trying to them to do this
    ? I just want to get rid of this card once and for all. just for the record I think Amex is one of the worst credit cards ever!

    • Karen, they won’t settle for a discounted lump sum on an account that is paid current, or near current. The account would have to be closer to charge-off before Amex would consider a settlement. If you have been paying on it for 7 years and have it down to $1,800, it’s probably best to just pay it off in full as soon as possible. Why incur credit damage after all this time when you are close to paying it off anyway?

  89. Charles~

    I had a $3000.00 balance on my gold card…the credit card that has to be paid in full every month! Well, I couldn’t pay it in full. They allowed me to make payment arrangements due to loss of my job. I had to pay $220.00 over 12 months. My online account shows delinquent. I checked my credit and it is 120 days past due!!! I have made payments faithfully on the 28th of every month for $220.00. If I am making payments, how can they report me to the credit bureaus? IS this wrong? They have reported me ever since I started the payment plan. What good is a payment plan if they are ruining my credit? I might as well quit paying it…

    • Jamiee, I understand your frustration, but the reason Amex is reporting the account as late is due to the fact that you deviated from the original terms of the contract. From their point of view, they are doing you a favor, period. They were within their rights to demand the full amount, and there was no requirement that they agree to these altered payment terms. It will be far worse credit impact if you simply stop paying on the new agreement.

  90. Charles: I have been Plat Amex customer for 28 years. had years where i put 150-200k/ year on the card in the heydays.
    have NEVER been late one time, have perfect history with them. 28 years straight. I have just gone thru brain tumor cancer treatment, and my wife had double mastectomy at same time. I currently owe around 30k on the plat card, am just past 30 days. I have a large settlement with my old company coming in Mar, over $1M…. but cannot pay amex for first time, really bothers me. I cannot afford to do the 12 month hardship deal, would be 3k per month, just cannot do it. could easily give them 1,000/month until my settlement comes in March… how would you approach them?? are they in 24/7?? should i attempt late at night, or during day… thanks great info on your site

    • George, sounds like a very tough situation. Best of luck with getting well again, both of you. At least you have some light at the end of the financial tunnel though. The problem you’re facing meanwhile is that Amex is very rigid about situations like this. Paying below the $3k/mo minimum on the 12-month program normally won’t stop the freight train from rolling down the tracks anyway. Forget about trying to time a call for late at night and expect that to produce a different result than a daytime call. Given your situation, you should request the 20-minute consultation with me, so I can explain in more detail what you will get hit with over the coming months, and how to respond to their tactics.

  91. I have a 18k balance, been forwarded to Zwicker and associates, they have tried to get me to pay a large amount per month with zero percentage interest, wanted my banking info, I refused. Told them that all I could afford would be $350/month for 60 months (which would be a win-win scenario, giving them 3k in interest. They dont seem to want to bite. So, I have been paying via bill pay to AMEX itself, $350/month.

    • Kelly, thanks for posting about your experience. FYI, just because you are making a 2% payment monthly, that does not meant Zwicker won’t eventually litigate the claim on behalf of Amex. Lawsuits intended to force the issue are very common with this creditor/agency combination.

  92. I have 2 Amex accounts , one I am paying and another I am not . I contacted Amex by letter and phone trying to work a smaller payment plan before and after I feel behind. Now just put in collection and worried what to expect . Will they freeze my bank account(joint account). Ps I have nothing ..living from check to check . I have a small part time job . I rent my home and lease my car .. Can they garnish my husband check? ..
    Thank you .. Very scared

    • Christin, they cannot freeze your bank account without first bringing a lawsuit against you and obtaining a judgment. Ditto for any wage garnishment risk — they have to sue first. They could only garnish a spouse’s paycheck if he was also a user on the account.

  93. Hi Charles,
    My Husband Has An Old Amex Card That Had A 12000$ Balance. We Filled Bankruptcy In 2009 After The LetteRs From A Law Firm Were Trying To Collect. Long Story Short, We Were Under The Impression That It Would Have Been Covered In Bankruptcy. Unfortunately Out Lawyer Didn’t File The Correct Papers To RemoveThe Judgment Against My Husband. We Are Selling Our House and Cannot do So Now Because There Is A $12000 Lien On The Property. My Question Is, Will Amex SettlE For A Less Amount (Not Knowing WeAre Selling Our House Of Course). If They Take The MoneyDuring Closing Err Won’t Gabber Enough For Our New House! There Had Never.Been Any Wage Garnishments Or Phone Calls. Please help

    • Erin, old judgments can be settled, with 50% being a common result. But you should talk to the BK lawyer that handled your case and see if there is anything he can do to correct the mistake.

    • Erin. What ended up happening with your situation? Were you able to negotiate something? I am facing the exact same situation right now.
      Thanks

  94. I had a corporate American Express with a company that I worked for in 2009. I owed a balance that I never paid. I now accepted employment with a new company that requires travel and they have the American Express Corporate Card. The new company does not want employees to use their personal credit cards and we have to apply for the AMEX corporate card. Upon finding this out I went and obtained a loan and immediately paid the AMEX debt. Do you think I will be able to get the AMEX corporate card with the new company?

    • Angela, you definitely would have been rejected by Amex had you not paid off the old balance, since they carry a permanent internal record of unpaid balances. Whether or not you will now be approved for a new corporate card will depend on your credit standing otherwise. So I will say “probably,” but there’s no way to know for sure until they respond to your app.

  95. In order to pay my AMEX bill during a period when I was out of the country, I used a bill payment service offered through my credit union. To make a long story short, the payments were not made by the bank even though the money was in the account. When I returned the account was in arrears by 90 days. I quickly brought it up to date, speaking with an AMEX rep to do so. Two days after I brought it up to date, I received a registered letter from AMEX saying the account had been cancelled. I was not overly concerned as I had just spoken to an AMEX rep and thought we had everything straight. Upon looking at my credit report, I discovered the account was listed as cancelled and sent to collections.
    However, when I called AMEX 800 number to attempt to ascertain what was going on, they were willing to speak with me and referred me to something called the “Responsible Lending” department. The rep there was nice but unhelpful, telling me I would have to apply for reinstatement of the account. At this point I asked if I could simply pay the full balance and have it removed from my credit report. I have three questions. First, what is the Responsible Lending Department? I have never heard of such a thing and I couldn’t get a clear explanation from him. Second, does the fact that AMEX reps are still talking to me mean that they have not turned it over to an outside collections agency? What are the chances of getting it reinstated?

    • Susan, I’ve never heard of the “responsible lending department” either. My best guess is that it’s something recently set up by Amex as a compliance function, due to the fact they were fined $85 million last year for various procedural violations. If they are speaking with you directly, then that does normally indicate it has not been assigned to a third-party collection agency. Your chances of getting it reinstated would be greatly improved if you could produce a letter from the credit union that dropped the ball on you. If they take responsibility for the error, then you may be able to convince Amex to reinstate the account, especially if you have already caught up the payments.

  96. I just received a letter saying that AMEX would not pursue suing me for on the debt because of the age of the debt??? What am I to make of this? This account was probably made active during 2006? I’ve made monthly payments, a few here and there late, but have always made them. They cancelled transactions on this card about 12 months into it, I’m assuming because I had incurred the maximum in a short period of time. What to do with this letter from them?

    • In Virginia, you probably received this letter because you’re beyond the Statute of Limitations where Amex could sue you to recover the balance. They normally do not sell to debt purchasers, but they will retain an internal record of the balance, so if you ever try to get credit again with Amex in the future, you’d have to pay off the old balance first. Otherwise, game over. Go buy a nice frame for that letter and smile every time you walk past it. :-)

  97. I have just put my 90 yo mother in a nursing home due to a stroke. She has an balance due on her AMEX card, has never missed a payment. She has NO assets other than SocSec. They are going to take that so she can remain in the NH on Medicaid. I am not responsible for her debts. How do I go about getting her balance cancelled since she will not longer be able to pay it and I cannot. It is not substantial. Less than $3000. Thank you.

    • Debra, just write to the creditor and explain the situation. Request that they write-off the account and leave it at that. They may or may not comply, but the worst that would happen are phone calls to your mother’s previous phone numbers. Don’t give them your own phone number or collection agencies may start calling you, etc.

  98. I had an Amex card which currently has a balance of $8,000. The last payment I gave to Amex for that card was on 06/2007, I was unable to make anymore payments due to hardships. My account is currently in charge off. My question to you is what is the likelihood that amex will sue me for the unpaid balance?

    • Peter, the odds are low that they would file suit 6 years down the road. Also, check the Statute of Limitations for your state. You may already be past the point where they could recover via legal action.

  99. Will creditors in reaching a settlement offer terms? Obviously it is easier to reach a settlement with a cash offer, but if I don’t have any cash, are they generally willing to offer terms?

    • Steve, it depends on when the settlement takes place. In most cases, if the account gets settled prior to the charge-off deadline, the farthest a creditor will stretch a settlement is three months. Beyond charge-off, we do sometimes see settlements that are paid over a 6-12 month term. But there is no guarantee it will work out that way, and there is no question that the motivation for a creditor to accept a settlement is based on receipt of a lump-sum.

  100. Charles,
    I want to thank you in advance for any help… and I have read and learned a lot from all theses blogs, so thank you again. OK… I was a 5 year Amex black card member, then I closed it back in 08 due to the yearly fee. Since then, I have a plum card that I primarily use (or used) to run my 28 yr. old construction company each month. This card as you may know, had no spending limit as well, provided it was paid in full each month. It also had a convenient deferred payment option, incase money was tight that month, which was very nice. Now due to financial restraints in my business this year, I will say for most of this year I used the deferred option almost every month. On average I would spend around 50K each month, leaving a “pay in full” balance respectively between 60k-100k. Last month, out of the blue, Amex decided to set a 50k limit on the card, and since the card at that time had approx. 85k as a balance, the card spending was automatically suspended until/if a payment was made to bring the balance under 50k. THIS WAS DEVASTATING TO MY DAILY BUSINESS since all my employees also have cards which were used for gas for my trucks and incidental supplies as needed, etc… Anyway, since this spending cap was set on the account only 6-7 days after that last statement ended, it was impossible to make that payment amount they requested, especially since the card spending was now suspended and not useable to what I was accustomed to charge on my daily basis… Long story short, my balance is 89k and after this month statement ending on the 20th, this account will be officially 2 months delinquent. I proactively have called, the only option they gave me was a 12month hardship program, and they want a payment of just above $7200 per month. with a 2.99% of balance fee if any payment was late. Without the ability to use this card, and using other spending means, I know I cannot make that payment amount every month for a year! My question, have you ever heard if Amex will extend the hardship option over 24 months or even more? My credit score is OK now, about 705 so I obviously don’t want this to go to collections. I have not agreed to the program yet, so I wanted to know if I have any other options that you could suggest?

    • Richard, sorry to hear about your situation, but yours is a story I’ve heard many many times. This creditor is literally destroying small businesses across the USA as they systematically restrict open credit on various product lines. Numerous small business owners have come to rely on this product to smooth out cash flow problems, but it is a dangerous situation to be in, since you are basically relying on the good graces of a single company. I’m not aware of any hardship programs offered by Amex longer than 12 months, sorry. About all I can tell you to do is complain loudly and publicly. Write your Congressperson, file a complaint with the FTC and the CFPB, etc. At a time when small businesses, which are the engine of our economy, most need assistance and lenient lending terms, we have creditors like Amex whacking credit lines for no real reason. I’m sure they will say they were just decreasing their risk exposure based on your usage patterns for this account, but the reality is that you were performing per the contract you agreed to, and they unilaterally altered the terms of the deal. You should also seek a legal opinion before this escalates out of control on you.

  101. have a 30k balance that havent been paying on. Assigned to a law firm. Talked to them today. They said that amex says my account is not eligible for settlement. they offered repayment only. I told them i have a bk attorney. Wondering if they file suit if it will make them want to talk settlement. i could care less about my credit score.

    • Duderino, I’m not sure I understand your question. They will just assume you are bluffing about the BK unless you really do retain an attorney and have him/her call them for you.

  102. Charles,

    Thank you for all the information and experience you provide here on your blog.

    I am in a bit of an unusual situation. I applied for a Amex Business Gold card for a company I do not own any part of. At the time we were in talks of me becoming a partner, but those have since fallen through.

    As usual, when things were going well, everything was paid in full in a timely manner.

    Things are no longer going well, and balance is currently ~80k. While the due date has just passed, I do not believe the company will be able to pay moving forward.

    Any suggestions?

    • Howard, if you personally guaranteed this account, then Amex won’t care if you are a partner or not. They will try to recover the balance from you personally. I suggest you go line this company up with a loan for $80k (without you guaranteeing it this time), so they can pay off the Amex and you can close down the account to shut down any future risk to you. You might need to go to a hard money lender if the company isn’t performing well. You should also talk to an attorney about the situation so you have a clear understanding of your position should the company fail to make good.

  103. Charles, thanks for your response. I do have a bk attorney who is a family friend. He suggested I call the attorney and see what they are offering to save me the cost of his firm charging me. I was just surprised that amex said my account was not eligible for settlement. So the question I have is do they tend to talk settlement once they have filed litigation? Does that get them to change what they are willing to accept? My bk attorney is really trying to get me to settle as much as possible in attempts to avoid a bk. Would it help if my attorney called?

    • Duderino, thanks for clarifying. What I can tell you is that it’s very common to hear “no settlement” when an account is first assigned, but as time goes by it’s usually possible to negotiate a settlement. The filing of the suit does not necessarily mean they will start talking settlement. Settlements after the suit has been filed do happen all the time. But it’s also important to consider that a lot of variables might come into play here — where you live, history of the account, type of credit product, which law firm has been assigned the file, and so on. I can’t go into more detail via blog discussion, but if you would like direct coaching you can order a one-off consultation for $150 (which includes 30 days of email follow-up support). Once I have a better feel for your situation, I could give you a clearer indication on the correct strategy and likely outcome.

  104. Hi Charles,

    I have four AMEX accounts Green, Blue, Delta and Starwood with balances of $7000, $17000, $32000 and $500. Looks like I will be asking for hardship progrmas for the three big balanced cards. Does AMEX close out an account in good standing if others are in hardship or default? If I deafault, I want to settle for a lump sum, do I negotiate these accounts seperatly or as a whole. I am hoping for 60% settlement, is that realistic?
    thanks

    • John, if you enroll in hardship plans for 3 of the 4 accounts, the creditor will probably not close the 4th account outright. But most likely, they will lower the available credit close to the balance owed for that account. This would definitely be the case were you to default on any of the accounts. I’m not 100% sure if they will still limit credit if you’re in a hardship plan on the other three, but I believe that would also be the case. In terms of settlement, yes, 60% is realistic. But it will depend on how aggressive they get on the larger balances. As to negotiating separately or together, it will depend on whether they get assigned to the same or different agencies.

  105. Hello Charles, I had AMEX call me put of the blue with a repayment plan. I fell on hard times and owe 15K. My account is seriously delinquent. All my other accounts from other cards got sold and I assumed AMEX did the same thing. Is it really Amex or an Indian rip off artist? They offered $2,500 up front with 17 monthly payments of @ $800. At the end of payment they said they would give me an Optima card. Does this sound legitimate? I’m weary to give them my bank info. They didn’t offer to send paperwork or anything just “set up a payment plan” Thanks for the info.

    • Richard, I’ve never seen Amex sell their accounts, so this is probably a third-party agency working on their behalf. The offer is probably legitimate, but they don’t document the payment plans the way they do lump-sum settlements. Your options would be to accept a payment plan on the full balance, which is the only way you’d ever get credit again with Amex. Or you could do a lump-sum settlement instead, with no option of ever having credit again with them.

  106. Charles,
    My Amex Gold Card is now over 180 days late, total balance of $34,800. I am sending small payments when I have extra funds available. 10k of the balance is under the pay over time feature at 15.24%, which is still accruing monthly interest. The account has been referred to GC Services, and I have received a few calls requesting payment, but advise them that I send payments directly to Amex via online, as I still have access to online banking.

    I have the Blue card with Amex as well at 11k; this card is canceled and I am sending payments accordingly. I am paying interest on this card at 15.24%.

    My credit score is now in the 580’s.

    I am not exactly sure on what to do, A.) Continue paying both Amex cards as previously mentioned. B.) Stop paying the Gold card and save that payment to try and settle further down the road. C.) Stop paying both cards and save the funds for both payments, and try and settle both cards.

    • Mike, I can’t provide specific strategy recommendations via the blog, as I don’t know enough about your overall situation to properly advise you. If you’re considering the settlement approach, then please submit your request for the 20-minute consultation. Go to the main part of the site, and at the bottom you’ll see the link to submit the form. Thanks.

  107. Great article! My credit limit for 2300 ballooned to 2900. I was a faithful customer since 1998 or so, always paid on time. My husband has been unemployed for 4 years and I’m the only one working. I stopped payments in Jan. 2012. Offered 65 bucks a month initially, they wouldnt accept that, so they served me in July through one of the law firms they work with. I’m in TX and have nothing that they can seize, I’m judgement proof. Concerned about them getting a judgement for my bank acct. Right now the most I could pay them is 30 bucks a month. I spoke with the agency they are working with this morning who informed me that they can’t discuss any payment plans until AFTER the trial. The intention of the call was to AVOID the trial! The agent told me to just send them the 30 bucks and they would apply it to my outstanding balance (no mention of sending me paperwork or making arrangements to document anything, just send us a check). Yeah right. The trial is in a few months and I cannot afford a lawyer. Any suggestions will be greatly appreciated.

    • Beth, I’m not an attorney so cannot advise you on a legal matter, sorry. If you don’t have funds to negotiate a settlement (still possible), then all you can really do is negotiate a long-term payment arrangement where they agree not to enforce the judgment (via levy on your bank account) as long as you don’t default the new agreement.

  108. I have an old Amex that I defaulted on due the financial crisis back in 2008. I never paid them and my credit report is stating that the account is scheduled to continue on my record until 10/14. Is it worth it to settle out with them or cross my fingers that it will indeed fall off in October of this year? Your thoughts?

    • Michelle, let’s make sure you are clear on the difference between legal liability for a debt and the period of time in which it appears on your credit report. The 10/14 drop-off only pertains to the delinquency being reported to your credit file, but has nothing to do with the liability itself. Depending on what state you live in, you may or may not be past the Statute of Limitations period for legal action. If you are past the SOL, and you’re not currently being sued (and there is no prior judgment), then it probably makes more sense to just let it drop off the credit report. Just be aware that you will never have credit again with Amex — they require the full balance to be repaid before they will issue a new card, even when the account is long past the SOL expiration.

      • Thank you so much for responding. How do I find out if I am past the SOL? I am in California. The outstanding debt was for $3700 and some change. I attempted to call and ask for a settlement but they would only offer $2900, no bargaining. I did not accept the offer and have not been in contact with them since. I do not have any judgments against me and they have not tried to collect or contact me since 2010. At this point I doubt they would allow me to obtain a new card so I could care less about that option, however this is the only derogatory account bringing my score down. Any additional information would be great, thank you!

        • Michelle, the SOL period for CA is four years. If you last paid anything toward this account in 2008, and there has been no litigation meanwhile, it’s past the SOL period as of 2012. If it’s going to drop off your report later this year, there isn’t really any compelling reason to settle it at this late date.

          • Great information, thank you very much! I was told by a banker that AMEX can change the dollar amount owed and reinstate the account on your credit history to keep it active and remain on your credit report for as long as they want. Is that true? Also, my more recent update on this debt is it went from being “schedule to remain on my report until October 2014″ to January 2015…how are they able to keep extending this?

          • Michelle, a balance change should not affect the drop-off date, which is normally 7.5 years from the point of default (assuming no payments were posted to the account during that period). So no, it’s not true as far as I know. File disputes if necessary with the three major reporting bureaus, and if you see a problem where they are extending the drop date by playing games, then file a complaint with the Consumer Financial Protection Bureau. Amex was already fined by them for credit reporting violations, and no one will be surprised to see this creditor receive multiple additional fines in the future.

  109. Hello, I have an AMEX Gold card. My account was reviewed last summer (had to provide tax and income info etc) and a credit limit was imposed. Shortly thereafter, I fell upon hard times. I was past due on my account and owed about $6000. I payed all of the past due portion over a series of several months in lump sums and finally paid the account in full last week. I did not have a payment plan with them during the time; I simply paid as much as I could, whenever I could. During this period when my account was past due, the account was cancelled, though it still appeared to be within AMEX and not sold to a third party. A rep indicated to me that once the past due portion was paid I could apply to reinstatement. What are my chances of this? What does this process involve? Should I do this now or wait a few months. The only negative reporting on my credit report is related to the delinquency of my AMEX account. I should also mention that I still have about $4500 that I owe on this account in pay over time charges only (I payed on this portion as well during the time that I was past due so that account is now current with no min due until the next billing cycle next month). I have other accounts all current and in good standing.

    • Meredith, Amex is one creditor who does grant credit again to former customers who are in good standing (i.e., no unpaid balances in default and no settlements where a partial balance was canceled). So your odds are pretty good they will reinstate. I can’t say for sure because it will depend on other factors on your credit report, etc. Just call Amex and ask whether your account now qualifies for reinstatement. There is no trick to it other than simply calling and asking them to evaluate you again for renewed credit. Just be careful you don’t rely too much on credit in the future, so you don’t get behind again.

  110. I have a charged off Amex account that I would like to offer a settlement. The balance is $11,000. I can only offer in the range 25%. Do you think this is reasonable? Do I contact Amex or a collection agency. How do find out the collection agency?

    • Betty, that would be a reasonable starting offer, but Amex is very unlikely to accept 25%. You can try, but 40-50% would be a more typical result with this difficult creditor. If an agency isn’t calling you, then start with Amex itself to see if the file is in-house. I’ve never seen them sell charge-off accounts to a purchaser, so it has to be either in-house or out on assignment.

  111. Hi Charles, I settled an account last year with American Express and they still have not sent a 1099-c form. $3900 is remaining. What should I do? Also the credit bureaus are still reporting the remaining balance.

    • Autumn, call Amex and ask why they have not issued the 1099-C. It should have come by now if you finished paying the settlement during 2013. FYI, you are still supposed to include the canceled debt as income unless you are eligible for the insolvency exemption (see IRS Pub. 4681), whether or not you receive the 1099-C. Regarding the continued reporting to the bureaus, start with Amex and ask why they have not updated your credit file. You can also file disputes with the reporting bureaus. If all else fails, file a complaint with the Consumer Financial Protection Bureau, which has already fined Amex $85 million for this sort of nonsense.

  112. i have an AMEX card I have not paid since early 2010. They stopped reporting on it in 2012. I just learned that they just reported it again as KEy deratory which dropped my score 50 points. It seems like they are trying to re age the debt. How do I correct this? Thanks

    • JR, it may or may not be re-aging. KDs are normally reported for 7.5 years from the point of default. As to correcting it, that would entail either a settlement, which will stop further damage but not reverse the prior notation as a derogatory account, or negotiating with Amex on a payment arrangement that will bring the account back to current standing.

  113. I have a balance of $44K on an AMEX I stopped paying in January bue to a decline in income. I called GC Services who was calling about the debt but they are saying they absolutely can not even submit a lump sum debt settlement offer to AMEX that is under $34K, and from their experience there isn’t the greatest chance it will be accepted. They also state that I need to make a monthly payment BEFORE an offer can even be submitted, and I will have to supply earnings statements from my business and other financial statements in the offer. Does this sound correct? It seems to be quite different than other stories I’ve read about people settling with AMEX.

    Also, I am going to try to contact AMEX directly since I was finally told by an online rep how to bypass their automated system that kept telling me that GC Services was handling the collection now and then cut me off. Do I have any chance of them working directly with me and cutting GC out of the mix?

    • Mike, no, once the file gets assigned to an agency, the creditor will not work with you directly. FYI, there is a ton of misinformation online about the settlement process, which can be very different from one creditor to the next, especially *this* creditor. So I strongly recommend that you stop trying to figure out what to do by reading free debt forums online, and get some professional help in dealing with this $44k lawsuit-waiting-to-happen.

  114. i stopped paying American Express in 2009 after some financial difficulties. Since then, they have sent at least 3 collection agencies after me. I have sent them all Cease & Desist letters ifnorming them of my rights and for them not to call me. NAtionwide Credit harrassmed me first calling me after I told them not to. . A company called First Source Advantage, acting on AMEX behalf called me 10/29/13 after I told me not to call me at work. That was the third time they called me at work. I also sent them a letter in 2013 telling them Not to call me anywhere.

    Last week, they called my Brother(who has his own separate AMEX account) looking for me. I took the number (8774430144) and spoke to AMEX and told them not to call my brother looking for me. Yesterday they called my brother again on his cell looking for me. I have in the last 4 years sent letters directly to American Express, First Source Advantage, and Nationwide Credit each informing them of my rights and if they needed to communicate with me, then they needed to do so by Mail. I filed a compalint to the CFPB earlier.

    This is very frustrating and am considering taking action and wanted to find out my options. I am a resident of NY and believe that I am past the SOL for them to sue and collect. I know there was a recent decision in NY that says that the SOL is from the state where the credit card company is based in and not from my home state. Knowing this, I am not concerned about being countersued. by American Express. Thank you!

    • JR, your best bet is to involve a consumer rights attorney to pursue FDCPA violations. Go to NACA.net and look for an attorney in your area. Many of them work on a contingency basis, meaning you’re not out of pocket to use their service. See if they confirm you have actionable violations to pursue.

  115. I received a settlement offer letter from AMEX in the mail. The header has the AMEX logo and says its from AMEX Travel Related Services, OA Research, El Paso TX. However in the letter it states for me to call Nationwide Credit, Inc. I only owe $1,407.83 and they are offering me a settlement of $844.70. In reading some of the posts in this forum, my amount seems minute. Nevertheless, I would like to make sure this is settled without causing any more damage to my pride and credit score. I don’t think I will ever be able to be an AMEX customer again after this. Is this settlement offer one I should take and will I be able to be an AMEX member in the future, say another 5-10 years?

    • Syleena, if you settle with this creditor, they hold a permanent internal record. If you apply for an account with them in the future, they will deny it unless that forgiven balance is repaid. I cannot advise you via a blog post on whether or not to accept this settlement. It depends on your overall financial circumstances, existing credit score, and so on. Sometimes it is best to settle and move on. For others it might make more sense to pay the full amount of the claim, etc.

      • I guess my concern is whether I’m paying an entity of AMEX or if this is a third-party collection offer. (There is the AMEX logo on the letter but references Nationwide Credit, Inc.) How would I go about making arrangements to pay the full amount? Since I assume I can no longer work directly with AMEX.

        • Syleena, Nationwide Credit is a collection agency retained by Amex to work this account. This is not a sale by Amex, so they are still your creditor. It’s just that they have outsourced to Nationwide, and won’t speak with you directly now. You will need to coordinate through the agency instead, that’s all. This is common, not a big deal.

    • settling these accounts will not improve your credit unless you live in NY where the charge offs and settlements get removed after 5 years from the date of first delinquency. I wouldn’t worry either about being never being able to get an AMEX card again. they tried that stupid argument with me. They like to think they are the best and only company, but Capitol One of great at helping people with bad credit. Other banks that offers cards are Citi, Chase, Bank of America, barclays, Discover, wells fargo, td bank, & USAA.

      • JR, in my view the purpose of settling a delinquent account is to put to bed any legal risk, rather than to improve credit. But I completely agree that there are plenty of fish in the sea when it comes to credit card banks!

      • Great info! Thanks.

      • Hello, I had a terrible divorce in 2010. Ex-husband beat me up, broke my legs, ribs, etc and due to the injuries became delinquent on all my credit cards. Ex tried to open more accounts in my name so I locked all my information at Experian, Transunion and the other major credit places. Now I can’t access any credit information because I don’t remember the passwords I created to block the accounts and now need to verify any of my credit charges. At the same time I was told I had probable lung cancer. While not working and thinking I might die soon (my three children were young) so I sold everything I could to care for them and pay medical bills. My divorce lagged on for four years, complicated by his felony charge. Long story short, the spots on my lungs were determined to be rheumatoid arthritis nodules, so luckily I am alive, but I lost everything. At the divorce, I was awarded the house but they had already foreclosed on it.I fought the foreclosure for several months but then I did something called “cash for keys” and for $2000, vacated the home. Unfortunately, there is a lien against me and my ex for that too. Additionally, I was given all $90,000 worth of debt. Due to my diagnosis of severe rheumatoid arthritis, I am unable to do any work. The government has discharged my $22,000 student loan, which is rarely done. So, I’m disabled, living on a small teacher retirement and haven’t paid on anything since 2010. I stay with a friend to minimize expenses but most of my money is used on medical bills. Most of the credit cards were in both mine and the ex’s name (I had excellent credit prior to this) but a few are in my name only. I was advised by an attorney to make an offer of 5 to ten cents on the dollar to each of the companies. So I have a lien from AX (2010) FIE card services (2011) and another from Vendors Resource Management for the home (2012) although I signed the home over to them in 2014. I’m at a total loss of what to do and am terrified of contacting the card companies but don’t know what else to do. I have absolutely no savings and can’t afford an attorney. Any advice is appreciated.

        • Cathey, I’m very sorry to hear about your difficult circumstances. It sounds like a tough situation for sure. I understand that you can’t afford to hire an attorney, but I do think you should look into whether there are any legal aid services in your community. You definitely need legal advice but I’m not an attorney. Many communities offer legal aid services for people who have low income or are disabled. It’s possible that you don’t need to do anything else at this point, not if the house is already gone and the liens you’re referring to were against that property. Disability income can’t be garnished for a civil debt collection matter, so there probably is not much your former creditors would be able to do at this point to recover from you. I’m not convinced that calling and offering settlements is the right thing in your case, not if you have no savings and nothing to offer with. See about legal aid services at low or no cost (pro bono work) before you do anything else.

  116. Charles – thank you for all of the valuable info you have provided on this site. I was a very good customer of American Express for almost 35 years using my Gold Card. I had an accident and became behind in my payments for a period of 5 months. I kept in touch with them, continued to send small payments, but at the beginning of the 6th month they cancelled my card and sent it to a collection agency. That same month I paid the complete overdue balance in full. They also cancelled my Blue acct which I had never missed a monthly payment on. Now I only have a $3500 balance on my Gold which I pay minimum on every month. If I paid this $3500 balance off would it help my credit score? Do you think I would be able to get another card soon from another company if everything else on my credit report is positive?I travel for business and this is really putting me at a disadvantage.

    • Barbara, paying off the $3,500 balance would have a positive effect on your credit score, since it would further reduce your credit utilization ratio. However, without knowing where you score stands now, there’s no way to answer your question. You might still be in sufficiently good shape that you don’t need to immediately pay off that balance, and could still get a fresh unsecured line from a different creditor. I suggest you run your scores before you do anything else or pay off the balance. If your FICO is still in the high 600s you should be able to get unsecured credit from some other bank besides Amex.

  117. i had a gold card with amex that is now delinquent… received a letter from a lawyer in my state that i need to pay the delinquent balance which is about 25k.. however the notice was sent in my relatives name??? why is that when i signed up for the account with my name and my social? what can i do to correct this? and what is the responsibility if its an error on their part when initially taking the application?

    • Anocali, I have no idea why Amex would have the account in a relative’s name, unless that person co-signed for the account with you when it was opened originally. They certainly have to direct their efforts toward the person responsible for the account. I would need to know a lot more about your situation before I could advise you, since the approach would depend in part on your financial situation, whether your aim is to settle or restore the account instead, and so on. You should consult with a local attorney about the matter, so you have a solid legal opinion before doing anything else.

  118. I owe just under $15,000 to AMEX; going on 7 months of no full payments (paid lower-than-due amounts early on, but AMEX still forwarded to collection agency at 3 months, so the small payments seem to be wasted effort). Due to financial hardship, I am unable to pay the high amount they request. I have repeatedly offered $200/mo, but they insist on over $400–I just cannot pay near that much. Once I got to not paying the 6th month, the collection agency stopped calling (maybe 3 weeks ago)–they said earlier that it would go back to AMEX. I haven’t heard from AMEX yet, I would like to call them, but I am at a loss as to what to say. I have no money to settle. I’ve entertained going through a debt management group–of which I’ve heard from various groups that I must go delinquent at least 2 months with ALL my creditors to qualify, else AMEX will not consider a debt-reduction plan or payoff. I am current with all other creditors because payments with them are low/manageable.
    Maybe two years ago, AMEX let me get on a payment plan with lower payments and lower interest for a year. When I inquired about getting the same this round, they said I could apply for the same program the following month (the 3rd month of non-payment), which I was going to do, but then they went ahead and sent it to the collection agency.
    The collection agency has argued more than once that I should not pay the other creditors so I can pay AMEX. I consistently say that that would be a waste of money and increased debt, incurring all those late fees. They push for that nevertheless. I refuse.
    My financial losses are personal, so I elect not to share here. I did share with AMEX and the collection agency. Neither have refuted the legitimacy of my income status and difficulty…just so you know.
    I do not own my home, I am paying off my car. I have nothing worth anything. What can they do to me? What can I do to get on a feasible payment plan with them? I would much rather tend to this debt, or at least make minimum payments, rather than quit.

    • Sandy, sorry to hear about your situation, but you’re describing a very common scenario with Amex. They really do not have any good long-term hardship programs to offer consumers, and they just mechanically route these files to their various agencies regardless of the person’s situation. You are correct that sub-minimum payments are a complete waste of funds, as paying below the minimums does not prevent the account from rolling forward another billing cycle. From what you are describing the account is probably past charge-off now, and it will most likely get re-assigned to a different agency than the one that had it before. All you can do is keep a dialogue going with the agency, until you work out an acceptable payment plan. As to what they can do to you, once a judgment is entered, they can garnish wages in most states, or levy bank accounts. It’s usually possible, however, to negotiate a payment arrangement once they assign to a local law firm. Crazy that it has to be this way, but that is how this creditor flies. Also, given that their agency essentially encouraged you to default with other competing creditors, you may want to consider filing a formal complaint with the Consumer Financial Protection Bureau. Add your voice to the many who are complaining about this creditor’s absurd collection policies.

      • Thank you, Charles, for your informative response. I will look into filing that complaint.

        Can you give me some input re: debt settlement programs? I talked to a couple of agencies. They say I have to stop paying all creditors, and they give me payment/payoff plans that will get me out of debt within 4 years tops. The options they offer include a more conservative route of essentially consolidating (they acquire lower percentage rates from each creditor), and is not as damaging to credit scores (I’m not too concerned about that right now); the other option is their negotiating a lower payoff, and credit rating is harshly affected. I apologize for not recalling the exact details of these options, but it IS tempting to go with one of these routes–it would mean lousy credit rating, but debts are resolved just shy of my retirement age. (I have nothing set aside or accruing for that event either.)

        • Sandy, anyone quoting a 4-year settlement program is pitching a scam, as far as I’m concerned. That absolutely will not work with Amex in particular. It’s a complete fairy tale to think you can make it through 48 months of delinquency without seeing one or more lawsuits. You need to spend more time reading my materials. Virtually everything on this site is about why you don’t want to go that route. Start by looking back through my blog series on the myths of DIY settlement, and start with the one about the myth of the 36 month settlement program!

          • Hi Charles! Good news! I took your advice and steered away from those debt settlement programs. I did attempt to connect with Amex, but there was a voice-recording saying my account had been forwarded to a different collection group–this time it was Nationwide Credit Inc. I believe I saw that name in your dialogues/articles, so felt comfortable with it. (Please note: Nationwide people were VERY nice to me–unlike the previous Gatestone group I mentioned in my earlier post.) After allowing me to state what I could handle with my budget, they were going to let me pay $500 this month, and then $200 every month for 6 months at 0% interest, and then check back with meabout what I could do to improve payments. When I agreed to pay $300 this month and $220/mo for the next 6 mos, I was connected to a manager to confirm our agreement, then the manager offered $8000 to pay it all off–encouraging me to pursue a consolidated loan at a credit union. I assured my credit union would not because in the past they rejected me just for the marks I acquired from Amex, but he encouraged me to try anyway. I ended up applying for a consolidated loan at a larger FCU, and they looked at ALL my debt, looked at my credit history/standing with all creditors, monthly payments, longevity at job and rental unit, and apparently saw I was worth the risk. They offered to take every debt I had–even back taxes. They even said I could keep my credit cards (I think best in a vault, though!). Yes, I do think it was a win situation for the credit union, but it seems to be a win for me. My monthly payments have decreased, the burden has already lifted, etc, etc. I sent a cashier’s check to Nationwide Credit AFTER they sent me a letter of proof of pending settlement upon receipt of the $8000. Now they have the check and they tell me to call them back in one month to acquire the final paperwork. They also told me repeatedly, so I wouldn’t be caught unaware, that Amex would file a 1099 form because of their loss of over $600. Being that Amex said Nationwide Credit had my account, that I got the letter stating the settlement, and that $8000 was a good offer for just under $150,000 owed (between the 40-60% I believe you suggested somewhere), it just seemed to be a smart move. Assuming that it is, I have YOU to thank for my not taking the plunge into the other direction, destroying my credit AND conscience. My loan, btw, will be paid off in 5 years, and I can refinance it in 1 to 1-1/2 years if my credit score improves. Honestly, I feel like God had His hand in this as well, since 1) the FCU loan was well above their common max amount they allow newcomers to their credit union; 2) Nationwide Credit seemed really wanting to help me; 3) your posts helped steer me in a better direction. I do feel I got blessed in all this. Thank you for your helpful advice. I REALLY appreciate it.

          • CRITICAL CORRECTION: Debt was just under $15,000, NOT $150,000. Now THAT would’ve been an amazing score if it was that big of a difference. LOL. Sorry ’bout that.

          • Sandy, thanks for reporting back with your results, and congratulations on working this out yourself. From what you have described, you found an effective solution and as long as you did get the Amex settlement in writing, then it should be fine. As to the 1099-C, don’t overlook the insolvency exemption in case that applies to you. See my November 2009 blog post for discussion, and I also offer a $29 Excel calculator for help with determining insolvency and completing Form 982.

  119. Hello, I am in Canada and am over 1 year behind on payments to AMEX they have offered me a 50% settlement on $5,000 debt. I would like more like 30% or $1500. They told me that the AMEX policy is to not settle for less than 50%. Do you know if this is true? And or if it might only be true for clients who are one year behind, if that might not change after 18 months etc.? I have negotiated all my other visa and mc down to under 15% after 18 months this is why I am having trouble settling for 50%. Thank you for any help you may have on this.

    • Jay, Amex is a totally different creditor from most. While there is no official policy statement anyone could point to in terms of settlement practices, after having observed this creditor for many years, I can tell you that while I’ve seen a number of settlements with them under 50%, such deals are rare and very hard to come by. The main concern with this creditor is that they do not sell their paper to purchasers, and they are aggressive in filing legal action to recover. If this is your last account and you can fund the deal, I’d get it handled and done with so it doesn’t came back at you down the road, in the form of a lawsuit.

  120. I had some financial problems and had to charge off my Amex card in 2008-09. The balance was assigned for collection to a law firm. I have been paying as per court order 35$ a week for the past few years. I tried to make a payment this week but the law firm told me that Amex had them close my file and they no longer can take payments for it. The gave me a number to call which was to Velda’s or Valdos LLC. Is it common for Amex to do this even though I had a court order to make payments to this law firm and have you ever heard of this collection agency or NCOS?

    • Michael, it’s not a common situation but it doesn’t sound like anything sinister. It may be that you paid back enough on the judgment that Amex changed the way they were handling the account, and shifted it to Veldos LLC so they don’t have to keep paying the law firm. I recommend you check with your local court to see if the judgment has been satisified or is still in force, then call Veldos to see what their story is.

  121. Hi, my husband and I own a business that is incorporated. We had business gold cards for many years but when the economy went bad and our business was greatly affected we ended up with a high balance and couldn’t meet the minimum payments, but paid what we could. They started adding interest and large fees for not paying the minimum balance. We attempted to negotiate the debt with them but they wouldn’t reduce anything. What they did do was offer us the option of paying a set amount per month for 9 months interest free, but that still left us with a debt of about $25,000.00. They said they wouldn’t extend the offer longer than that. We met our payments but they did cancel our account, which we expected. After the 9 months passed we didn’t receive any more statements in the mail and then a rep called us after we missed one payment and said our minimum payment was about $230.00. Since I was late, I made 2 payments over the phone with the rep. Since then we still don’t receive statements in the mail and I have been making payments of $230 each month. When I log into the website, it tells me the account has been cancelled. They show the minimum payment due each month (which goes down a bit each month and is now at $223 for this month). The weird thing is they aren’t adding any interest or fees at all anymore. My question is – are they still expecting me to pay them every month? It seems strange that they aren’t adding interest and fees any more and the minimum payments are now so low.

    • Bonnie, the reason they are no longer adding interest and fees is because the account is beyond charge-off now. It’s been declared a bad debt on their books, no longer a performing account. Yes, they still expect you to pay off the remaining balance. I don’t know why the payment has been set so low, but my best guess is that they had you on a hardship plan where you were paying at or below 1% of the balance each month, and it’s still set for that after the charge-off.

  122. Hello. Great blog. Got a question about AMEX, though.
    I am 5 months past due on an AMEX card with a balance of $15k. I’m trying to submit a settlement offer, but Gatestone (the debt collector) insists on an initial payment before they even submit an offer to AMEX. Does that sound right?

    • Clueless, no, that is just the agency trying to convince you to pay something so they can earn their keep. :-)

      • Ugh… I really don’t like these people. Thanks for the reply. It really helped.

  123. Hi Charles,

    This is a great article, it was very helpful in understanding AMEX. About 3 years ago I had a balance of 24k on a blue card which AMEX closed because I lost my job and couldn’t make payments. They sent my account to a law agency in CA (state of residence) I made arrangements with the agency but they were never completed, the lawyers on the account kept getting changed and I had a few returned checks. It’s been 2 years since I’ve made a payment and no one has tried to contact me. This morning my account was $4000 short, I called the bank and they gave me the name of the law group I had an agreement with. What are my options? I’m willing to continue payments but I also want them to return the 4k.

    Thank you

    • Kevork,

      Glad the article was helpful to you. If you had a judgment that was never resolved, then it sounds like they placed a levy on liquid bank funds. This will keep happening until you work out a stipulated agreement where they agree not to further levy or garnish, provided you meet the new terms of repayment as agreed. Another option would be to attempt settlement on the remaining balance. I recommend you first review the situation with an attorney to see if there has been any sort of procedural violation. But to be candid with you, it’s very long odds you will see the $4k back.

  124. Hi,

    How is SOL determined? By the state I live in or the state applied for credit. I recently move from CA to HI. My AMEX debt is now with Nationwide Credit.

    Thank you.

    • Mike, the SOL is normally based on your current state of residence. Nationwide isn’t a law firm, so if you have the resources I recommend you try to settle with them while they have the assignment, as the outcome will be better than settlement via an in-state law firm.

  125. I was served today with lawsuit papers from American Express. I am mortified to begin with. However, I am in a position to pay this off in two equal payments. What should I do, contact the law agency and see if they will accept or send the money to American Express. Please help, confused.

    • Jeannie, if you have been sued then you need to work out the arrangement with the law firm rather than American Express directly. As long as you resolve this before the due date for you to answer the lawsuit, then you can avoid getting a judgment against you. If you’re able to pay the whole amount then there should be no problem at all. If you want help reviewing the documentation, I do offer a document review service for only $100.

    • I am not an expert and have my own AMEX debt.

      Even though you are in a position to pay off the amount, I would call the lawyers and settle and try starting at 50%. Since I don’t have an income, I will start my negotiating at much much lower percentage.

      Blessings to both.

  126. Wow, this is the best advice on settling with a creditor I’ve ever received! Thank you, Charles! I’m working on a settlement with American Express and perused the web to find out what other people’s experience has been. I’m certainly glad I found this website. I’ll do as you’ve recommended and hopefully, everything goes well. Thanks again.

    • Liv, you’re welcome, and glad the information was helpful to you.

  127. I have about 20k in Amex. Lost job and moving back to Russia ( my home country). I don’t care about credit score and have no asets in the US. my daughters family are still in the US and I used to live with them. Will they get in trouble if I move back to Russia and don’t pay? I have income or anything now. Thanks

    • Elena, your daughter and her family would only have a potential problem if they were also listed on the Amex account as authorized users. The creditor will attempt to collect from any person who was included on the account. But otherwise, they have no way to go after someone just because they are a family member.

  128. Good Day,

    I have an outstanding balance of $13,500 with American Express. I stopped payments around July 2014 due to American Express being unable to help me out on lowering my interest rate for me to pay down the balance. I was told since im never late on a payment nothing they can do untill i start missing payments.It has been many months now im currently negotiating for a settlement and they told me their last offer through Nationwide Debt Collector is $5,866. And if i dont take that it will escalate to another level , when asked what that is they refused to tell me like its against the law and also that next offer will be more that this. What should i do ? I can only afford to pay out about 3k.

    Thank You

    • Mike, the reason the rep at Nationwide didn’t specify what “next level” means is because they are not a law firm and don’t want to violate FDCPA rules by making an outright threat of legal action. The reality is that Amex will usually send it to a law firm next and that firm will file a lawsuit against you. The offer on the table is already below 50%, which is a good outcome. I would normally advise a coaching client to accept this offer after some additional haggling efforts, while it is still with this agency and has not yet been reassigned to a law firm in your state. It’s just not going to happen at only $3,000, sorry — that’s 22% and they will sue rather than settle for that.

      • Thank You Charles

  129. Hi Charles,

    Thank you so much for this incredibly helpful information, reading your blogs and comments are so insightful. I have a one time 30 Day late payment on one of my tradelines from 2012, I was told that it’s possible to have it deleted from my credit report, can you point me in the direction of how I can do that ( without hiring someone to do so.) Also, I’m an authorized user on my friend’s card and it has a very high balance which is pulling my score down, I was advised I can also have this information off my credit report without being taken off as an authorized user, how do I do that? Please advise.

    Thanks in advance.

    Hopeful Amy

    • Amy, the only way to “remove” a 30-day late notation on your credit report would be to file disputes with the credit reporting bureaus. The entry may or may not come off, however, depending on whether the creditor verifies it to the bureaus. Regarding the account where you are authorized user, you can have yourself removed as AU and that will get the balance removed. However, I’m not aware of a way of having the tradeline deleted when you are in fact actually an AU for that card. Also, my experience has been that while cross-reported AU accounts do form part of the overall credit history, they don’t have a direct effect on FICO score. I’ve tried having people add themselves as AUs on other family member accounts, and the score did not budge one point up or down. So you may be making a false assumption here.

  130. Hello.

    I’m in the process of finalizing a payment plan (15k) with the collection agency/attorney’s office for AMEX so the attorney’s office can dismiss the lawsuit with the court (MD) prior to the first court day (May 2015). The concerns I have are as follows:

    1. The draft agreement I was sent is worded “Stipulation of Settlement” – although I’m not settling but instead playing the full amount owed via monthly payment plan. Should it be worded different as opposed to the settlement language?

    2. If I’m paying the attorney’s office directly (vs. AMEX), why would AMEX be providing me with a 1099C (as referenced on the agreement). Plus I’m paying the full amount and not settling.

    3. Will my payments be transferred to AMEX, reflecting payment on my debt?

    Any other information you would like to provide with regard to my situation is most welcomed.

    Thank you.

    • Alyssia, I would have to review the actual document to be certain, but it sounds like they are just using their standard template for settlement post-lawsuit filing, which is often called a Stipulation for Judgment, rather than Stipulation for Settlement. The 1099-C language is included because the form covers settlements. If there is no forgiven balance involved, there will be no 1099-C issued. Or, it could be they are waiving some fees and interest, in which case a 1099-C would have to be issued where $600 or more is forgiven. Yes, the payments will be transferred to Amex, but the law firm is responsible for monitoring the ongoing payments and forwarding to Amex.

      • Charles, thank you kindly for your prompt response! I will respectfully request that the agreement be changed to Stipulation of Judgment (as opposed to Settlement). Ok, understand re the 1099 factor. Not sure why I wouldn’t make my payments payable to AMEX (vs. the collection agency/attorney) if all payments will be transferred to AMEX? In the Agreement, it states to make the payments out to their company? I will also request a paid as agreed status with AMEX once I pay the balance in full. Is that far fetched to ask for that status once I pay it off?

        Thanks again!

        • Alyssia, you should order the $100 document review service if you’re not certain the document covers what you need it to. It might be titled differently depending on what state you are in, so I was not saying it definitely had to be titled Stipulation for Judgment. The title really doesn’t matter as long as the language has the necessary clauses. You seem unclear on why the payments go to the law firm. It’s because the lawsuit is active until you complete the payment series, and this is what Amex is paying them to do. When you finish paying the balance, that will not erase the fact that it was previously delinquent, but the balance will be reported as zero and the damage will fade into the past.

  131. My business incorporated, had a card.. Got caught in the recession. 21k in debt. Worked out payment plan of
    $ 870.00 per month for a year to get balance paid on amount not carried over time. American Express said I graduated. Then was billed $ 140.00 per month on the remaining over time balance being charged 0% interest. The card was canceled at the beginning of the original payment plan. I had more financial hardship and got behind on the monthly payments of $ 140.00 They have now turned the remaining $ 10,700 over to a law firm for collection. Until now nothing has shown up on my personal credit report only on the business report. The letter I received from the law firm is addressed to me individually not the company and states if I do not dispute the debt heir office will assume the validity of the debt. My concern is this is a means of moving this from a business debt showing up on that credit file to a personal debt. Given the advice I read on debt validation above I am not sure what to do. Also, I do have the ability to get caught up on the payment fairly rapidly but not to pay a large sum in settlement.

    • Fred, I’ve never once seen an Amex “business” card issued to a small business owner that had not been personally guaranteed. It’s common for them to report business accounts to the personal credit file after default. If your goal is to protect your personal credit score, then there’s really no choice but to work it out a payment arrangement with the law firm that will restore the account to current standing. Validation definitely will not help in this situation. That language appears in the letter only because it’s a required clause per the FDCPA. Amex would easily be able to verify this is your account, so that strategy is about the worse approach in this situation.

  132. My business has failed due to a bad partner who wouldn’t sign personally with AMEX. The company owes $43,000 and is not yet dissolved but it has no assets or money. I signed personally 20 years ago. They have been calling me and trying to get some money but I no longer have a job and my only asset is my house. They say they won’t discuss debt-reduction. Can they put a lien on my house and, if so, is that only after they go after the company and receive a judgment? I sold the assets of the company and need that money for other creditors who may be willing to reduce my debt and for my own home mortgages. I have no income except social security. Any comments?

    • Joe, if you personally guaranteed the account, then yes, they can come after you personally. They don’t have to go after the company first. They can file suit against you, and if they obtain a judgment, then they could indeed lien the property.

    • Charles,
      Thanks for your reply. I may be able to play it back with in a year. I have other businesses that I am currently working on that will allow me to settle this debt within a year. Should I still seek bk? Also, Because all these transaction took place within 90 days, would BK remove them?
      thanks again.. much appreciated.

      • Henry, I am not a bankruptcy attorney, so cannot answer this question, sorry. Also, I did not say that you should seek bankruptcy, only that you should consult with legal counsel since it’s such a large balance and litigation is all but certain.

  133. Ill try to keep this short. I was in the car export business for almost a decade with my client. The car business has been rough and mu client suggested that he could could sell new iphones. The first 4 transactions were very smooth. I would use my amex business platinum card and purchase about 100k-150k and send them to him in Asia. The 5th time I was able to purchase almost 300k worth of iphones and shipped to Asia. My customer tells me customs has been holding onto the shipment and he is working on getting everything out. It has been almost 3 months, and so I owe Amex 300k for about 3 months now and received my first call from an Amex law firm. I am in California. My client and I have an outstanding relationship and he has trusted me with millions of dollars in the past. With the car business being obsolete and was the main source of my income, I have been dipping into my savings the last few years and there is not much leftI do not know when and if my client will be able to get the iphones out of customs and pay me back. As of right now, I have to assume that I could have gotten screwed by my client as well I have told amex this and they just tell me to keep them updated and will be in touch. I am not sure what I should do with Amex. Since its such a large sum, should I get a lawyer? Sorry if this is kind of irrelevant, but I thought the background to the story may make a difference. Should I get a lawyer? Try to get on a repayment plan? File BK?

    • Henry, I would definitely advise you to meet with an attorney to discuss the bankruptcy option. There is no question that Amex will litigate for such a large balance, because they already litigate on much smaller claims than yours. If you are not able to pay, a lawsuit is coming your way, probably within 60 days or less. So it would definitely be a wise move to line up legal counsel in advance, as the attorney could help draft a response to the lawsuit to buy more time, if you aren’t prepared to file BK or want to hold off to see if the cash can be freed up, etc.

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