- Contact the original creditor first, even when you receive notice from a collection agency.
- Attempt to negotiate a temporary low monthly payment or a lump sum settlement.
- Consider debt settlement or credit counseling -- both can work with American Express.
I have not paid my American Express bill in full and now have a $60,000 AMEX debt that is in collections. Help!
I am the owner of a small trucking company in Texas because of all the rain i have not paid my American Express bill in full. I have been sending $300 a month on a $60,000 bill since June I have been contacted by nation wide credit and told where to get the loan and how much I can pay each month I was never sent any notification that i would be contacted by them and have been called at work once and by cell during working hours. Why am I in collections and what will happen to me?
It is unusual for a person to begin receiving collection calls from a third party collection agency, such as Nationwide Credit, without first receiving written notification from the collection agency. The reason that you are in collection, however, is that you are failing to make the full minimum payments on your American Express Bill and now you have overdue credit card debt. I will explain more in just a moment.
Quick tip #1
If you are considering some professional help to resolve your debt problems, start with a free consultation with one of Bills.com's pre-screened debt relief partners.
Nationwide Credit is a primary collection agency used by American Express. I would suggest you not make any payments to Nationwide Credit before contacting American Express and confirming that Nationwide is handling your account. You should also contact Nationwide to ask them to send you a written statement of your account, including the balance and the account number.
Quick tip #2
Concerned about what is appearing on your credit report now? Check your credit report today and get a free credit score instantly.
It is not too Late to Call American Express Directly
If you contact American Express directly, it may be willing to work with you to bring your account current and resume making payments. American Express may be more willing to work with you than the collection agency in helping you establish a payment arrangement you can afford.
Hopefully, your income has improved enough to let you pay more that $300 per month, as that is quite a small payment on a $60,000 account (in fact, it is negligible... your minimum payment on $60,000 is probably over $2,000 per month... and going up with late fees and jacked up interest rates).
Even if you cannot pay more than $300 right now, Amex may be willing to accept the lower payment amount for a few months if you can commit to larger payments once your income has improved.
You do not mention in your question whether or not you communicated with American Express about your financial difficulties before you started making lower monthly payments. If you did not speak with American Express before they referred your account to collections, then you should definitely do so. Even if you did talk to them before they sent your account to Nationwide, it is worth calling American Express again to discuss what you can do to pull your account out of collections and bring the account current.
If American Express will not offer you an affordable payment arrangement directly, you can ask Nationwide what repayment terms they can offer you, as they may be able to work out a payment arrangement with you as well.
If you can raise a lump sum, you may also be able to settle the account with either Amex or the collection agency. For example, if you can raise $20,000, American Express may be willing to accept that amount to resolve the account and forgive the remaining $40,000.
While the settlement amount AMEX will accept will vary depending on the status of the account and your financial circumstances, it is likely that Nationwide or AMEX will accept a settlement on the account if you can raise enough money to offer a reasonable amount.
Consider Debt Settlement
To assist you in negotiating a settlement, you may want to retain the services of a professional debt negotiation firm, which specialize in negotiating settlements for their clients with the creditors.
A settlement agency may be able to establish a payment plan to help you build a lump sum to offer to AMEX as a settlement. There is one major drawback to debt settlement programs. They will significantly damage your credit while in the program and for a period afterward. Given that you are already delinquent, your account has been assigned to a third-party collection agency, and the size of your debt, your credit is likely already severely damaged.
As you are currently unable to afford to pay AMEX, the impact of debt settlement to your credit may be worth the benefit of ridding yourself of the credit card debt. To learn more about various debt resolution options, I encourage you to visit the Bills.com Debt Help page.
Another issue you must consider when deciding how you should resolve this debt is whether or not you will need this credit to continue operating your business.
If you are able work out a repayment arrangement with AMEX to bring the account current and pay if off, AMEX will likely allow you to maintain your account for future use. However, if you decide to try to settle the account, AMEX will almost certainly close the account.
In addition, the damage to your credit rating caused by not paying the account off in full could cause you significant problems in obtaining future credit from AMEX and from other creditors. If you need credit to operate your business, you probably should work with AMEX to bring the account current, in order to minimize the negative impact of this delinquency.
As mentioned previously, I encourage you to contact AMEX to discuss the options available to you to repay this credit card, hopefully allowing you to maintain the credit you need to successfully operate your business.
I hope this information helps you Find. Learn & Save.
Did you know?
Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Auto loan debt was $1.607 trillion and credit card was $1.129 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Collection and delinquency rates vary by state. For example, in Hawaii, 11% have student loan debt. Of those holding student loan debt, 7% are in default. Auto/retail loan delinquency rate is 3%.
While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.