91st day went to Zwicker....120 days to Apothaker with 0% offer to settle full balance or 55% settlement..lump sum...i'm at 150 days without a payment....close to chargeoff. Be aware that you’ll hear various kinds of options presented to you depending on how far behind you are on payments. I offered a settlement of 50%. If youâre more than three payments late, the odds are good that youâll be hearing from an outside collection agency. This creditor rarely sells its accounts, no matter how old. If I settle what will happen to the points? You must have a letter in-hand before you make payment on your settlement. Itâs simply a part of the collection culture that developed at American Express, which positioned itself over the years as being âdifferentâ than Visa or MasterCard. 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. Chargebacks on American Express (Amex) cards serve the same function as chargebacks on other credit cards. Alternatively, Zevon notes that she and others are entitled to recover up to $5,000 each in statutory damages. This provided some much needed advice. 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. Charge-offs can occur even if … Yes, it is totally possible for you to negotiate with GCS on your own and reach a settlement. Thanks for the great advise… 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. Yet it’s highly unlikely you will encounter this situation with respect to any type of American Express account. Reading Tea Leaves. Money Personality Quiz and Test. The settlement applies to American Express only, but other credit card companies and issuers should be aware of the issues and be "forewarned," said Janacek. If you are negotiating settlements with multiple creditors, itâs better to set up a special checking account for this purpose. Many consumers have both personal and corporate cards issued by this creditor. Otherwise they are hard to work with. Milton here from Complete Debt Solutions, my advise to all our clients is not to settle any Amex card. Don’t play games or make up stories about your situation. I’m in a Debt Settlement program with Freedom Financial. Once you reach your goal, accept the settlement and take the deal off the table. If youâre unfamiliar with debt settlement, youâre probably wondering how someone who canât make their monthly payments would have the funds needed for a settlement at, say, 50% of the total balance. 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. Get on the phone a couple of times a month and let them know about your situation. That said, however, you *can* do the same thing on your own if you choose to. Debt settlement is just as much about managing risk as negotiating savings. The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line, These Private Student Loans Can Be Easily Discharged in Bankruptcy, Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan, Why People Make Poor Decisions When They Have Money Troubles and Debt Problems, How to Get Your Money Back From a Debt Relief Company if You Feel Like Youâve Been Scammed, What Repaying Your Debt Will Cost You in Retirement â Calculator, My Income is Dropping and I Want to Settle My American Express Card, Amex is Refusing My Settlement Offer. American Express will not take a payoff settlement for a credit card. American Express sued my client and the business for the full amount due, plus court costs and attorney’s fees of $630. 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. 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. If you’re more than three payments late, the odds are good that you’ll be hearing from an outside collection agency. The corporate cards are generally issued to the corporation itself, even though your name appears on the card, so generally it is not advisable to attempt settlement on this type of account, as it could have a direct effect on your employment status. Understand that the majority of settlements with American Express are negotiated through these third-party collection agencies. Am I reading that right? It can be a huge game changer financially, as well emotionally. These are one-time funding sources, in other words. When it comes to settlement with American Express, there are some specific facts about this creditor that you should be aware of. Itâs trivially easy for an original creditor to produce a stack of monthly statements two inches thick and mail it to you. When it comes to settlement with American Express, there are some specific facts about this creditor that you should be aware of. Don’t be greedy. 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). Client had 4 accounts totaling $30,819.53. 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.). I have a feeling that my query is more wishful thinking. I was sent a list of charges but believed I was not responsible for half of those charges. You must have a letter in-hand before you make payment on your settlement. The Class Plaintiffs claim that these rules insulated American Express from competitive pressure to lower merchant fees and caused an upward spiral in merchant fees for American Express, Visa and MasterCard. I have a corporate card that my former employer claimed I had personal purchases on. Once you reach your goal, accept the settlement and take the deal off the table. Don’t panic if this happens! But many clients want to settle ALL of their debts and not carry any balances coming out the other side. Donât panic if this happens! 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. I have been making minimum payments on time for the past 2-3 years and most of it is interest and my balance remains almost the same. Itâs 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. Charge-offs are considered a very negative credit event and cause significant damage to credit scores. Many consumers have both personal and corporate cards issued by this creditor. ZipDebt Debt Relief — MAJOR ANNOUNCEMENT FOR 2020 and COVID-19: Full Service TAILORED DEBT SETTLEMENT Available for Select Clients, Do-It-Yourself Coaching & Services No Longer Offered, How to Settle Your American Express Credit Card Account. Will this change when Amex hand over the former employer’s balance to the agency? 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 itâs very possible that youâll be dealing with a debt purchaser or their collection agency. Federal Regulators Fine American Express an Additional $27.5 Million. Where the risk is lower, we can hold out and try to do better on the settlement percentage. GCS will most likely have the assignment through the charge-off deadline at 6 months. Copyright 2020 Manchester Publishing Company, Inc. All Rights Reserved, Making the Tough Financial Decision, Part 3 — Paying Off $63,000 Credit Card Debt & Lessons Learned, Making the Tough Financial Decision, Part 2 — Our Dream Home Goes on the Market, Making the Tough Financial Decision — Our Dream Home Goes On the Market. Start out with an offer around 20-25% of what you owe, but state this in terms of a dollar amount. It is literally impossible to mail a check fast enough to kill the account without another fee being added. 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. Don’t panic if this happens! If youâre facing a legitimate financial hardship and canât 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. Take the high road and negotiate in good faith with your creditors. I have an account with AmEx that charged-off in 2006 (original c/o amount was $42k). There are definitely situations where a debt validation letter is appropriate and effective. 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). I think the article will give you the basic answers to your question. One important tip for determining the risk factor is to assess WHERE the assigned collection agency is located. Regardless, I plan on paying until the balance is paid off, and amazingly, AmEx has left me alone, as long as the payments keep coming. Take the high road and negotiate in good faith with your creditors. Settlement with Amex requires steel nerves and precision timing, and is best handled via a customized full service approach. That statement will remain on your credit report for 7.5 years from the date first reported by American Express. The first offer you receive from an agency will rarely be the best offer available, no matter how convincing the explanation that this is âthe best we can do.â. This is also called an ACH transaction, and it means you provide them the bank routing number and account number off your checking account. I’m thinking to stop making minimum payments and try to settle my account. If you’re like most clients, you’ll feel a tremendous sense of empowerment at achieving a successful settlement. Client had 4 accounts totaling $68,685.74. Although, when the account went “rogue,” the interest alone was above 30%, in addition to late fees. It’s still actively reported as a charge-off on my CR, but, aside from our mortgage, it is my only account with any sort of balance on it. I Can’t Quit the Debt Program I’m in That... Is the FBI Letter I Got About Titan Legal Processing... https://getoutofdebt.org/114824/can-use-american-express-points-settle-american-express-card-balance. Any thoughts on this? Do you know if the recent AmEx “late fee” settlement will affect charged-off accounts (given that half of this remaining balance is late fees and interest)? Start out with an offer around 20-25% of what you owe, but state this in terms of a dollar amount. If you've fallen behind on your American Express bill or are simply tired of throwing away money each month on interest and fees, debt settlement may be one option for eliminating your debt quickly. 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. In the five years since I originally published this article, I’ve received numerous questions and inquiries about negotiating settlements with American Express, and talked to hundreds of consumers who were finding it difficult to reach an agreement even with all the advice I had presented in the article. But my understanding is that Amex will have to send notices to former customers if their accounts qualify for any refund. I believe it has to be looked at on a client by client basis, rather than taking a blanket position across the board. 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. Listen carefully to these proposals and note them down. 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. 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! If the account is presently being reported current standing, then it will probably show as a closed but positive account.  Glad the information was helpful, and congratulations on your settlement success! Ah, that “.5” just kills me! Understand that the majority of settlements with American Express are negotiated through these third-party collection agencies. It's far more effective to "fast track" debt settlement in 12-18 months. It sucks, but the predictability of collection aggression by AMEX, and the collectors they use, can actually be used to your advantage. In fairness to FFN, I don’t believe for a minute that GCS would refuse to settle if FFN presents a proposal they can accept. Debt settlement with American Express - Nationwide Credit. It can be a huge game changer financially, as well emotionally. That would likely happen if you did sign a personal guarantee on the corporate card, which is probable. (2) Their collection law firms often file lawsuits as quickly as 4 months late, so many (if not most) American Express settlement negotiations are taking place with active litigation in play. We were able to reach a debt settlement for a one-time, lump sum payment of $12,000, without having to file an Answer to the lawsuit. Amex have the HIGHEST standard when it comes credit rating. Once a charged-off debt has been settled, the creditor will typically begin reporting the account to the credit bureaus as having been “settled for less than the full amount due.” And just as the score sees a charge-off as a derogatory event, it also sees a settled account in the same way, despite the debt having essentially been wiped out. It doesn’t matter if the delinquent account is 20 years or 10 years. They normally do not take payments for less than the total amount. This isnât a matter of âtrust,â or âdistrust.â Itâs just simple common sense that any agreement modifying your contract with American Express (or any other creditor) must be in writing. Erick, it’s quite common for Amex to assign delinquent accounts to GC Services for collection, and that often happens when the account is around 90 days late. Antitrust investigations in Europe. Get on the phone a couple of times a month and let them know about your situation. That way you can react quickly in case anything goes amiss. American Express doesn’t sell off its accounts but does assign bad debt to attorneys and debt collectors. Debt validated, and account moved to an in-state legal firm for your troubles! The 36-48 month programs offered by most debt companies have high risk for collection lawsuits. That way you can react quickly in case anything goes amiss. If the charge-off exists on your report a result of your own error, you have a few options. Only $29! more power.. I have two accounts with American Express. 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. American Express denies these claims. It’s probably not hurting your score all that much at this point anyway though. We negotiated a settlement today. One more important point about settlements with American Express. Achieving a settlement with any creditor is a matter of balancing RISK versus SAVINGS. “Charge-off” is an accounting term for an unpaid debt that a bank or credit card issuer removes from its books. Thanks again for your expertise. If you are not carrying a balance on the corporate account, then the worst that could happen is closure of that corporate card due to default on the personal account. Most Amex settlements do end up being negotiated via outside agencies like GCS. The European Union has repeatedly criticized Mastercard for monopolistic trade practices. Most of them prefer check-by-phone or electronic check (same thing). View the outcome, letters, cost, time to complete. One more important point about settlements with American Express. It doesnât have to be long! With your letter in hand, then you can make your payment. With your letter in hand, then you can make your payment. Again, I plan on paying this monster off in full, just wondering what my credit report will look like after 7 POINT FIVE years. I also have like 500,000 points. 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. [Note: This article originally appeared as a guest post on Steve Rhode’s blog at GetOutofDebt.org. Debt Consolidation Forums Debt Consolidation and Debt Settlement forums American Express Charge off. It’s trivially easy for an original creditor to produce a stack of monthly statements two inches thick and mail it to you.  Milton here from Complete Debt Solutions – What Amex are telling you is they don`t recognize this company or they have “a” history. American Express reports to the major credit reporting bureaus, with charged off accounts listed on credit reports. Did your employer just hand you a card or did you have to sign an American Express agreement for the card? Amex also told me they would hand it to a collection agency if they didn’t get the rest in 10 days I told them not possible. AMEX (GC Services) is telling me that they will not settle with anyone else other than directly with me. 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. 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. If those payments were under the required minimums, that could account for the charge-off notation. There are NO exceptions to this rule. I called Amex and they said they would not report to credit agency and I assume that means the delinquency of this charge will not affect my credit score. Amex will settle for 50% of the amount in a lump sum. The reason this matters is because there are some important differences that need to be taken into account in terms of the âcollection cultureâ at different types of creditors. The company converted to a bank holding company structure in November 2008 in order to become eligible for Treasury Department assistance under the infamous âTARPâ program. We feel much better now knowing that the money is going to the original creditor and not to a collection agency. Have been making monthly payments since, and have dropped the balance to $22k. Cashierâs check by Federal Express is one method, but you want to be sure that youâve coordinated payment method with the agency. Thanks a lot for any insight! I am sure I signed something, but the corporate card is not the one I have a balance on. The reason is because they have the documentation. The charge is past due 3 months or so and I made a payment of $5K today. 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. Nice article.. Amex does not have my phone number or address, only the email address. While I’ve successfully coached many people to reach settlements with American Express, I am no longer actively recommending the Do-It-Yourself method for dealing with this very difficult creditor. Insolvency Calculator for IRS Form 982 Now Available! One option is to scour the charge-off entry for any mistakes. If youâre drowning in debt and want some expert advice and coaching as you negotiate through your settlements, please visit us at ZipDebt.com. Listen carefully to these proposals and note them down. If you are in a financial crisis, that is enough, and you just need to be patient and persistent. Derogatory entries are supposed to drop off after 7.5 years. In addition, many people carry a lot of Amex debt as part of their overall mix of accounts. payment to credit bureaus will be reimbursed the money they paid plus interest.” So it’s possible you might receive some relief on this account. Consumer Borrowing Up in June. A big part of the problem in dealing with American Express is due to two key factors. Cashier’s check by Federal Express is one method, but you want to be sure that you’ve coordinated payment method with the agency. Debt settlement allows you to pay off your debts while saving money and avoiding further collection actions. Am I able to negotiate a settlement with the 3rd-party collections agency in exchange for them removing the charge-off from my credit report? Charles, thank you for the insight. John, what I was saying in the article is that it’s unwise to attempt settlement of an Amex corporate card that was issued to you by your employer. Date: Mon, 08/16/2010 09:16. This debt was completely my doing, not American Express’s, but I’d certainly take a reduction in the balance due. If I overpay, The fee for too much in the account is always enough to put the account in debt again. It doesn’t have to be long! Advice? If you are in a financial crisis, that is enough, and you just need to be patient and persistent. In that case, you’ll want to contact the creditor and the credit bureaus to have it removed. Be smart. Youâre 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. American Express is the contractor. I am currently in the process of trying to kill off my Macy’s acct. You are aiming for a financial outcome that you can live with, not a world-record low percentage. I don’t know who to believe. Let’s say you are talking with a third-party agency in a different state and they have agreed to a 40% settlement. I always recommend proactive telephone contact with creditors, and American Express is certainly no exception. The article seemed to say that. Jose, I actually answered your excellent question over at https://getoutofdebt.org/114824/can-use-american-express-points-settle-american-express-card-balance. So I panicked since I only knew about this today. FYI, the settlement mainly pertains to “consumers who paid old debt in response to deceptive promises to report If American Express did charge off the account, which it sounds like they did, the charge off will remain as a statement of fact after the account reaches $0. however, the former employer insisted that I was fully responsible. I always recommend proactive telephone contact with creditors, and American Express is certainly no exception. The reason is because they have the documentation. 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. You are aiming for a financial outcome that you can live with, not a world-record low percentage. Anything above that amount will be reported and taxed. 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. American Express offers world-class Charge and Credit Cards, Gift Cards, Rewards, Travel, Personal Savings, Business Services, Insurance and more. I have a personal Amex account and a corporate Amex with my new employer, so far they don’t seem to get affected. If you have it in writing first, it’s ok to do this. The Settlement Notice explains the litigation, the settlement, your legal rights and what benefits are available.. Judge Nicholas Garaufis of the United States District Court for the Eastern District of New York is overseeing the case known as In re American Express Anti-Steering Rules Antitrust Litigation (II), No. Most of them prefer check-by-phone or electronic check (same thing). WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today announced an enforcement action with orders requiring three American Express subsidiaries to refund an estimated $85 million to approximately 250,000 customers for illegal card practices. The charge-off is coming up on the seven year mark, so I wonder if it will drop off, provided I’m still paying. There are NO exceptions to this rule. The one unbreakable rule in debt settlement is to GET IT IN WRITING FIRST, before you pay! Can they be applied against the settlement amount? The one unbreakable rule in debt settlement is to GET IT IN WRITING FIRST, before you pay! It just has to cover the essentials â 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 âsettlement,â or âsettlement-in-full.â Simple enough! You can avoid this by shaving off no more than $600 on the debt you owe. Thanks in advance. However, when you are trying to settle an American Express account, it would be a major tactical mistake. And of course, there may be many situations where it makes good sense for the consumer to take the approach you recommend. These are one-time funding sources, in other words. Many of those agreements I’ve seen require you to personally guarantee the debt. Donât be greedy. I don’t see it making sense, for example, to tell someone who has $10k with Amex and $20k with other creditors to keep one-third of their debt in place — that only makes the other negotiations that much more difficult, and doesn’t address a significant chunk of the debt problem itself. If FFN settles it for you, then they would be settling through GCS too, no difference there (aside from their fees). I think the corporate card is owned by my employer with my name on it as stated in the article. Milton, I’m surprised to hear that your firm advises all clients to never settle an Amex card. "If you already have a low score, [a charge-off] will still drop your score but by fewer points," says Ryan Greeley, Denver-based editor of the Better Credit Blog. There are definitely situations where a debt validation letter is appropriate and effective. 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. What Are Your Spending Habits? Freedom Financial is telling me that they will not settle with AMEX, but with the collector. However, other major credit card banks have been known to sell their delinquent accounts to the highest bidder. 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. Debt settlement with Zwicker & Associates - American Express. So should I wait until the collection agency to contact me and negotiate a discount on the rest of the balance? Does my delinquency and other negative activity affect my corporate card and get reported to my employer? Amex are the only creditor if you pay your card in full after 120, they will give your card (account) back with half of the balance, lets say your credit limit was $5000.00 and you defaulted after 3 months they will send your account to collection agencies. American Express discount rates for retail stores and restaurants will downgrade (meaning the rate increases) if a transaction is keyed-in rather than swiping a card, but most rates are the same regardless of transaction method. If youâre like most clients, youâll feel a tremendous sense of empowerment at achieving a successful settlement. One-Time funding sources, in other words win-win scenario just hand you a or. By American Express an Additional $ 27.5 Million about managing risk as negotiating savings ok to do this majority! Option is to get it in WRITING first, it ’ s ok to do better on settlement... Clients, you ’ re trying to kill off my Macy ’ s.. 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