I had an AMEX with a balance of $1500. I was making timely minimum payments but, they closed it on me 11/2008 and it went to collections. I just got a letter from AMEX that they want to settle the debt and have me pay 40% of the past due amount spread out over the next 13 months in payments ($50.00 a month). I'm all for this however, I would like to know if 1. Can I request them to report to the CRA as "Paid as Agreed" on my account rather than "Account Settled". 2. Once this debt is paid off by OC will I still have to deal with CA and write validation letters from here on? 3. They have a phone number on the letter. Is it best to correspond to them over the phone or in writing? Thanks in advance!
I don't understand why your account would go to collections if you were making on-time payments. Did you stop making payments after they closed it? I assume that was the case. Anyway, here are my thoughts... 1.) You can certainly push for this, but they don't have to comply. If you could convince them to not report the entire account, that would be even better. 2.) If the account is with a CA, make sure the OC pulls it back from collections before paying anything. You don't want to be dealing with CA after the fact. 3.) I think it's always best to correspond in writing. Good luck!
Thank you for your response JoshuaHeckathorn! At the time AMEX was many closing accounts which they thought were considered "high risk" before the recession hit. Mine was one of them. I was making minimum monthly payments and from what read online at the time was that they kept accounts who were paying off their balances monthly and carrying low balances. After they closed my account they demanded me to pay the full $1500 balance. I couldn't pay that amount and asked if I can make monthly payments and they wouldn't let me do that so, I let the debt go into collections, I was really upset about the whole situation. I'll add the suggestions you mentioned to close the account and have them pull it out of collections. I wasn't aware that you can request to have the account removed. I hope they agree it to. If they don't do I keep writing back to them? Their settlement letter expires on 11/24?
I still don't understand how Amex could have demanded payment in full after closing your account. As long as you were at least making on-time minimum payments, I don't believe they had the right to demand payment in full. Yes, they had every right to close your account, but you should've been able to pay off any remaining balance based upon the terms of your contract. If that's really how it went down, it sounds very shady to me. If the account has been transferred to the CA for collection and the OC won't pull it back in order to deal directly with you, then you'll need to start dealing directly with the CA. I wouldn't pay the OC anything unless I was sure the account was pulled from the CA...you don't want to be still dealing with the CA after the fact.
So just wanted to post update and ask for further advice from everyone. I sent the settlement counteroffer to AMEX in Nov. and requested that they pull the account from CA and remove my account from all CRA. I just received a letter requesting to pay now 30% of the past due in monthly payments for the next couple of months. They lowered the payment from 40%-30%. I guess they don't want to remove my account from all CRAs. :/ Should I resend another counteroffer letter again that I will pay 30% "in full" to make my offer sound better and again request to pull from CA and remove the acct fr CRAs? Or should I just accept their settlement offer. If I do choose to do so, what will my account status on my CRA say? Their settlement letter states the following: "We will report your settlement agreement to the credit bureau agencies." There is no wording that they will place a status of settled, paid in full, etc. Thanks in advance!
If you choose to accept, your credit reports will eventually show a "settled" account. Hopefully they'll just list it as "settled", which is still inherently negative, but it's better than a "Paid Collection". If you're not happy with this, I would keep negotiating and fighting for complete removal. You may have to pay a higher percentage if you really want to convince them to go for it.
