American Express handles little of the collection activity for the credit cards people fall behind paying. Your options for dealing with Amex accounts that are already placed with a debt collector (no matter the type), are going to be limited to working things out with the collector in most cases.
You can pay or settle with debt collectors on American Express credit cards at the different stages of collections. Below is general information about resolving an AMEX account. I can get more specific with each individual persons situation when you post details, and the debt collector you are dealing with, in the comments at the bottom of this page. Be sure to include how long ago it was that you last made a payment.
You are not behind or not yet 3 to 4 months late with AMEX payments.
AMEX has some programs available for repayment when you are struggling with your finances. You can call a customer service rep at AMEX, and if early enough (within a few months of missing payments), they can help you bring your account current, or enroll you in a temporary repayment plan. These plans are generally going to offer you a lower monthly credit card payment for several months, and up to 12.
The lower AMEX bill is because they are dropping your interest rate down during the months you are on the hardship plan.
Try to avoid taking advantage of any short term payment plan if your financial setbacks are not just temporary. You have no assurance the AMEX will extend the lower payment plan once your time on the temporary plan is up. That means your monthly payments will go back up, and may still be unaffordable.
American Express also regularly works with nonprofit credit counselors who can get your monthly payments reduced, and get your interest rate lowered for the life of the balance, or while paying through the counseling agency.
You can be current with your credit card payments and still work with a counselor to pay your AMEX bill each month.
If you are not yet 4 or more months delinquent in paying your AMEX credit card, and would like to see if you can get a lower monthly payment for the life of the balance, I would encourage you to consult with a credit counselor and get an exact payment quote at 800-939-8357, choose option 1.
If you have more than one or two credit cards you are struggling with, a counselor can help you consolidate most or all of those accounts into one lower payment.
Unpaid American Express credit cards are not sold to debt buyers.
One of the first things to point out to people dealing with American Express accounts in collection is that they do not sell debt.
Many major credit card issuers sell off some of their credit card bills (that remain unpaid long enough) to debt buyers. AMEX does not bundle up unpaid credit card accounts to sell off as a general practice. That is not to say AMEX will always retain ownership of their delinquent debts (they have since the 70’s). Bank policies do change from time to time, and operation realities could lead to AMEX changes too. But for now, AMEX is ultimately the legal owner of your unpaid credit card account.
This is an important distinction to point out. There are situations where someone dealing with a debt buyer collecting will have additional strategies to consider.
Amex is also one of few credit card lenders of its size that has no internal recovery and collection department to speak of. That is not to say they are lacking in customer service for their credit card account holders, but that once your account is behind enough to be dropped into their collection pipeline, you are typically not going to be connected to internal AMEX collection resources. You are, more often than not, going to be routed to third party collectors that AMEX sent your account to.
If you have had financial setbacks that caused you to stop paying American Express, but your accounts are already out for collection, you are generally going to find that any payment arrangements you make, settlement offers you receive, or are able negotiate yourself, will go through the debt collector that is currently collecting for AMEX.
Settling your AMEX debt with a debt collector.
The type of settlement you can realistically aim for with AMEX credit cards can depend on several things. Your account usage leading up to missing payments is sometimes part of the equation, and so is how collectable you look to the debt collector handling the account for AMEX.
Who the debt collector is can also impact your settlement opportunities. Not all American Express debt collectors are the same. Let me break this down a bit.
The most common debt collector is a working on a contingency. If they can get you to pay something through communications through the phone and mail, they get to keep a percentage of what you pay. American Express accounts can settle for as low as 35 percent of today’s balance with some of the collection agencies they use, while others may not settle for under 50 or even 60 percent.
There are files that are flagged for no settlement. Some of the reasons this may happen are:
- Your account with American Express is too new.
- Recent AMEX card cash advances.
- Amount owed consists largely of balance transfer.
- The balance owed at time of default was made up of mostly recent months credit usage, or big ticket items.
There are large debt collection law firms that pick up large blocks of AMEX accounts to collect. They will call and write to you in seemingly the same way as a third party debt collector I just described. But do not let the similarity fool you. Some of these attorney networks, like Zwicker and Associates, can and do file collection lawsuits with the courts.
Smaller local collection attorneys may contact you about your unpaid American Express card. And any collection letter you receive from an attorney with letterhead showing an address in your state, or one neighboring you, is a clear indication that your risks of being sued to get you to pay have escalated.
Settlements with attorney debt collectors for American Express accounts, whether in or out of court, tend to be at 50 percent or higher. If you appear highly collectable, and are already being sued, decent settlement percentages are harder to negotiate. If you are reading this and have recently been sued for an Amex account, post where you are at in the process in the comments below for more feedback.
What if you cannot pay or resolve your debt right now?
You mentioned you are not able to pay what is owed, and would hopefully be able to get a payment plan to only pay back what a prior debt collector offered as a settlement. Unfortunately, those lower balance settlement offers usually come with an expiration date. You can try to negotiate the same deal with the new debt collector, but they are not bound by that prior offer, and settlement amounts you can realistically target can change dramatically the more time you need to make monthly payments.
Remember that a debt collector is all about how the timing is perfect for you to go ahead and pay them. Anything you could say about how tough your finances are at the moment will circle back to what you can pay today and in the near future. Every communication from collectors is for the exclusive purpose of getting money from you. That is how debt collectors are, for the most part.
You need to be concerned with your whole financial picture, and not just this one bill. No matter what the sense of urgency you feel when you are dealing with collectors, always know your cash flow, and never agree to something you are the least bit concerned you will be able to follow through with.
Unless you are dealing with an attorney debt collector licensed in your state, or have already been sued for collection, you probably do not have a debt emergency. And while I do recommend taking advantage of some of the better offers to settle your AMEX accounts with debt collectors early on, you can only do what you can. And even if you are in late stage collections with AMEX (in the courts or about to be), you still have options to navigate the situation.
Anyone dealing with an AMEX credit card with a debt collector is welcome to post questions and concerns in the comments below for feedback.
Oh… and I should point out that not paying your AMEX credit cards may result in losing miles and other points in rewards programs, and those not paying their full balances back may not be able to get approved for American Express accounts in the future.
14 comment(s) for this post:
- David:
27 Feb 2015 I have a delinquent account with AMEX. I tried to settle with the collection agency but was told AMEX doesn't settle and wants the full amount paid. I tried to enter a payment plan and was not able to keep it. I then got sued by the collection firm. I have negotiated a payment plan thru a stipulated agreement that I am about to sign. However, I keep wondering if it is true that AMEX won't settle in this case. The stipulated agreement says I will make payments until the full balance is paid and that if I go into default they can request a judgement. This is very serious and scary so I want to just sign the agreement and move on to make payments. But I also keep wondering if I am being naive and have not negotiated hard enough. I have settled with 2 other credit cards in the past and got a 15% settlement and 30% settlement. So I am not new to negotiating debt settlements but in this case I haven't been able to get anything other than a repayment plan. - Michael Bovee:
27 Feb 2015 There are indeed instances where you will not be able to settle a credit card debt. I do not have much information to go on to say that is whats happening with your AMEX account, or if the attorney debt collector views your file as highly collectable, and will not budge based on that. How high are you willing to go to settle? Your expectations may be for too good a savings, as AMEX does not excel in the area of lowest offers approved. Now that you have been sued, the settlement rates can get worse. But debt collection law firms know the real time value of money, even with a file that they see as likely to pay in full (plus costs). I have done 60 to 80 percent lump sum settlements in this situation. If you do not have the resources to pull together a much higher lump sum offer than what I think you were trying for, and making payments is how you need to proceed, is the amount you are agreeing to pay the law office each month something you are completely confident you can follow through with? Did you file an answer to the lawsuit with the court? What is the total you are agreeing to pay? Who is the law firm handling this for American Express? - David:
27 Feb 2015 The law firm is Zwicker and Associates P.C. The total debt is $15,200 which is the amount I owed AMEX. I do not have the resources to pay a settlement at this point but tried to negotiate with them. The stipulated agreement states that I will pay them the first appearance fee. They will file the answer as well. I received the stipulated agreement from them. I am agreeing to pay $250 per month for the first 12 months and then $300 for the remaining of the debt until it is paid in full. At first they wanted me to commit to $500 per month because AMEX wanted the debt paid in 36 months at the most. I almost agreed to that but continued to negotiate until I got this plan. Again, I am trying to figure out if I could have done any better. Thank you - Michael Bovee:
27 Feb 2015 If you are not able to fund the settlement of, say 60 percent, in a lump sum, or broken up into a few payments, than I do not think you were going to succeed with settling. But you did get them to go longer on the payments than I typically see with Zwicker when collecting AMEX accounts, let alone once sued. In that way, you have exceeded expectations! - Sal:
23 Mar 2015 Hi Michael: I have American express credit card debt that was charged off and a collection law firm which I settled to pay in full through monthly payments for three years after I signed a court settlement order. I paid my monthly payments for 16 month and recently I received a letter from another law collection firm asking for settlement. I reached out to the original law firm and they informed they no longer managing the account and I should contact American express collection which I did and I was informed that my account was transferred to the second law firm. I have couple of questions: How can I get a written letter from the first law firm certifying the payments I made for 16 month and stating the my remaining balance What tactic should I use with the second law firm to settle the remaining balance, is it possible to negotiate the remaining balance taking into consideration that I have court order settlement? I would appreciate any advice you may have to negotiate the tensing balance as I am trying to recover my credit ASAP. Regards Sal - Sal:
23 Mar 2015 Thanks Michael I owe around $13k. I can get family help for 50% in the next 10 days but would the second collection law firm accept to settle for 50% taking into consideration the court settlement order with the first law firm that requires full payment. Thanks Sal - Michael Bovee:
24 Mar 2015 I would request an accounting from the prior collector for AMEX In writing, and also from the newest collection firm handling the account. American Express will likely be of little help in this regard, but I would ask them as well. As far as settling, what do you estimate you owe now? How quickly can you pull together half of that to settle the AMEX account in one lump sum? - Michael Bovee:
24 Mar 2015 You can circle back and settle debts for less than the balance owed, even when you are making small monthly payments that were agreed to in or out of court. We have helped people negotiate this result with American Express accounts in the past. Am I certain you will be able to do this? No. While I see settlements on AMEX accounts at this late stage of collection go for this low, it can often depend on how collectable you look on paper. If you are paying a host of creditors on time, and that shows on your credit reports, you will often appear to debt collectors as someone who can manage to pay more. And sometimes it can come down to how well you carry yourself as having a hardship, or some internal dollar or volume goals at the collection firm. If that made all this sound complicated, it isn't, you just need to pick up the phone and start the conversation. Negotiating the better savings tends to favor the person with a financial hardship and/or someone who has other collections appearing on their credit reports. - Mike:
25 Mar 2015 Michael- I want to repay my entire balance (e.g. not looking for a settlement) and owe about $40K on my Gold Card. I have completed the first 11 of the 12 month program to reduce my balance, but want to set up something more permanent at a much lower rate for a much longer period of time. I have done that with all my other credit cards but don't have a sense for AMEX since I, maybe mistakenly, entered into ther initial 12 month program they offered. Do you think this is possible? Do you think I should try and work that out with Amex? They seem only to be willing to do 12 months plans. I don't want to wait until it goes to collections; I want to pay what I owe over time and set up a permanent plan. Any recommendations? Thanks, Mike - Michael Bovee:
25 Mar 2015 Call my hotline, 800-939-8357, and press option one to talk with a credit counselor about whether AMEX would accept you into a debt management plan with just your one account. If you can, your payment plan with AMEX can be stretched for several years. I expect the answer to be no while you are still in a temporary payment plan with AMEX. You might want to wait to call between the 12th payment being made, but before the next one (non payment plan monthly payment) is due. - Mike:
25 Mar 2015 Michael- How are you affiliated with Cambridge Credit? Also, what are the benefits of using a non-profit debt management company? How do I confirm that AMEX is receiving payments and has agreed to the deal? Do I get a notice from AMEX? - Michael Bovee:
25 Mar 2015 I have no affiliation with Cambridge Credit Counseling currently, paid or otherwise. The benefits of using a credit counseling agency (they are nearly all nonprofit), at least in your situation, would be the long term fixed monthly payment you said you were seeking. Many banks will not extend their hardship or reduced payment plans more than once, or more than once in a so many year period. But some will still work with you the same way, and longer term, if you are enrolled in a credit counseling debt management plan. I have a whole section of the debt relief guides dedicated to the topic, starting with an outline of what credit counseling is and how it works. You can review more about the benefits of credit counseling. You generally will still get your monthly billing statements from American Express while you are enrolled in a DMP. I encourage people to review those statements each and every month to make sure payments and credits are applied according to the plan. - Katharine:
06 Apr 2015 I reside in Florida and own my property tax homesteaded condominium. American Express Centurion Bank has filed a civil lawsuit against me; the summons hasn't been served. The credit borrowed was approximately 10,000 dollars. My financial reality is that I don't have enough to pay even a portion of the money sued for or for an attorney. The legal aid service near doesn't offer assistance with consumer debt or bankruptcy concerns. How do I protect my Florida residence from a judgement lien? Thank you very much for the service you provide! - Michael Bovee:
06 Apr 2015 If you live in the Condo you do not have to do anything to protect your home if the collection attorney for American Express gets a judgment. There is no dollar cap on the amount of home value Florida protects from judgment creditors, only the property size is capped (by acreage).