- American Express may sell a delinquent account.
- Negotiate with the law firm that bought your account.
- Learn negotiating techniques before opening a negotiation.
I just received a summons for American Express debt. Should I negotiate with the law firm or American Express directly?
I owe American Express $6,500 on a credit card that was closed in 2007. In 2006 after being laid off from work, after never having carried a balance, I began to fall behind in my payments after I used the card for living expenses while I searched for a new job. What a mistake that was. Over the last few years I have made online payments for the card and have also paid off a second Amex Gold card balance as well - but haven't been able to pay more than $50 per month on the credit card. My goal is to pay the entire balance on this card - I'm not looking for any special deals or discounts. Last night I came home to a summons taped to my front door - the Plantiff being Amex - not a huge surprise. My question is, should I contact their attorney directly to ask about structuring a payment plan, or should I contact Amex first. What's interesting to note is that the summons does not reflect the last 2 payments I made to Amex. I'm willing to increase my payments and would like to know who to contact regarding a possible payment agreement. Any advice would be appreciated.
Relatively speaking, the amount of debt on your American Express charge card account is low. Therefore, it is likely though not certain that American Express sold your collection to the law firm that filed the lawsuit against you. If my assumption is correct, then negotiating with American Express or making additional payments to the company will be fruitless. Negotiate an out-of-court settlement with the law firm directly if the law firm owns your collection account. Look at the summons carefully: Is the plaintiff the law firm or American Express?
American Express also has the option to hire a law firm to represent it in filing a lawsuit against you. If American Express is the plaintiff, then you have the option to try to negotiate an out-of-court settlement with American Express directly or the law firm.
Review the Bills.com resource Negotiating debt to learn more about tactics and techniques for dealing with collection agents. You may want to repay the entirety of the debt over time, but American Express wants a resolution to the debt now. Negotiating a lump-sum settlement is a compromise that will clear the debt from American Express's books and allow you to achieve debt freedom.
If you cannot reach an acceptable settlement amount with the collection agent, or if you do not have a lump-sum available to pay a settlement immediately, consider hiring a debt settlement company to do the heavy lifting for you. For a no-cost quote from a pre-screened service provider, visit the Bills.com debt saving center.
More About American Express Debt
I answered questions about American Express debt for other readers. See American Express Bill and AMEX Debt where a small business owner had $60,000 AMEX debt in collections and needed to know the debt resolution options; American Express Debt Settlement where a reader asked if he or she could trust an unsigned faxed settlement offer from a collection agent; Negotiate American Express Debt where a reader wondered why an American Express collection agent required a hardship letter when negotiating a settlement; American Express Company Debt, where a reader asked if he or she was responsible for American Express debt incurred during the course of employment and the employer is now defunct; and Deceased's American Express Debt where an authorized user of an American Express account holder who died recently has liability for the debt.
I hope this information helps you Find. Learn & Save.
Dealing with debt
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 Q2 2022 was $16.15 trillion. Auto loan debt was $1.50 trillion and credit card was $0.89 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 Texas, 15% have student loan debt. Of those holding student loan debt, 9% are in default. Auto/retail loan delinquency rate is 6%.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.